kritchanut - Fotolia
Citing unemployment levels not seen since the Great Depression, U.S. Senate and House Republicans sent letters Thursday urging President Trump to "suspend" guest worker visa programs until the economy recovers or for at least one year -- whichever comes first.
"There is no reason why unemployed Americans and recent college graduates should have to compete in such a limited job market against an influx of additional H-1B workers, most of whom work in business, technology, or STEM fields," wrote Republican Senators Tom Cotton of Arkansas, Ted Cruz of Texas, Chuck Grassley of Iowa and Josh Hawley of Missouri, in their letter to Trump.
Trump's H-1B position opened the door for these two letters late last month after announcing a "pause" on immigration in the U.S. He excluded H-1B workers from his initial executive order pending a report by his administration on ways to "prioritize Americans."
The letters, along with a new study on H-1B wage levels, may renew fierce debate over the future of the H-1B visa program. The wage study by the Economic Policy Institute (EPI), a think tank based in Washington, D.C., argues that the government is allowing employers to undercut U.S. workers on pay.
House lawmakers referenced the visa pay issue in their letter: "The workers enrolled in these programs hold no unique skills relative to those held by American college graduates, but the cost of their services is significantly less," wrote Republican House members Lance Gooden, Louie Gohmert, Michael Burgess, all of Texas; Paul Gosar of Arizona; Matt Gaetz of Florida and Mo Brooks of Alabama.
The senators want all guest worker visas suspended for 60 days, and after that, all new nonimmigrant guest workers suspended for one year or until national unemployment figures return to normal levels, whichever comes first. Along with H-1B visas, the lawmakers argue the suspension should include H-2B visas and the Optional Practical Training (OPT), which allows students to get anywhere from one to three years of job experience on a student visa.
Whether the White House has the legal authority to suspend guest worker visa programs remains to be seen. Court challenges by industry are all but certain.
It's all about wages
Much of the controversy around the H-1B visa program has to do with wages.
The EPI analyzed prevailing wage levels that employers filed with the U.S. Department of Labor for last year. The report's broad finding, released this week, is similar to one made in 2011 by the U.S. Government Accountability Office (GAO). Nine years ago, the watchdog agency reported that more than 80% of H-1B jobs were certified at the lowest two wage levels -- or below local U.S. median wages. The EPI study puts that number at 60% in 2019.
The EPI's report underscores the complaint of critics of H-1B wage levels.
"Current H-1B wage protections are insufficient to guarantee a market-level wage in all cases, and we've seen too many program abuses," U.S. Rep. Zoe Lofgren (D-Calif.), chairwoman of the Subcommittee on Immigration and Citizenship, said this week to SearchHRSoftware. "That's why we need to reform the H-1B program, including wage requirements."
Although the recent letters urging Trump to suspend the H-1B visa program were all from Republicans, interest in changing the H-1B program is bipartisan, and many bills have been introduced over time. Sen. Dick Durbin (D-Ill.) and Grassley have sought H-1B reforms for more than a decade.
The H-1B issue is held up by inaction on more comprehensive immigration efforts, but also by the political power of the tech industry. Microsoft spent nearly $10.2 million on lobbying in 2019, according to the nonpartisan research group Center for Responsive Politics.
Critics have long argued that the H-1B visa program allows firms to hire low-cost labor. Industry proponents argue that visa holders are often graduates of U.S. universities and have in-demand skills.
U.S. allows lower wages
But the U.S. government allows visa workers to be paid less than citizens and permanent residents.
Prevailing wages are divided into four levels. It starts at an "entry level" and rises to Level 4, which is for the most experienced employees and even managers. Prevailing wages are set by region and occupation.
One example cited in the EPI study looks at the wages for the occupational category "software developers, applications" in the Washington D.C. region. The Level 1 wage is about $76,000; the Level 2 wage is $96,600; the Level 3 wage, the median, is $117,500; and the Level 4 wage is $138,000.
Microsoft is one of the largest users of H-1B workers, getting approval for 5,275 visa workers in 2019, according to the EPI study. In that year, Microsoft assigned 35% of its H-1B positions at the lowest wage rate, Level 1, on the Labor Condition Application, which employers file to the Dept. of Labor for each H-1B applicant. It assigned 42% at Level 2, according to the EPI. Microsoft declined to comment for this story.
To be clear, the EPI isn't alleging that tech firms are underpaying their visa holders. They may be paying many of these workers above the median wages, but the system the government has set up requires employers to select a wage level, according to Daniel Costa, the report's lead author and the director of EPI's immigration law and policy research.
By selecting the lower wage levels on the Dept. of Labor form, firms "are reserving for themselves the ability to pay the Level 1 or 2 wage, and we have no way to verify what was actually paid," Costa said.
A defense of U.S. approach
Intel, for instance, doesn't pay anyone Level 1 wages, but it assigned 33% of its positions at Level 2, according to the EPI report.
Intel uses "the H-1B program to hire foreign national graduates of U.S. university advanced degree programs in STEM disciplines essential to our large, leading-edge semiconductor manufacturing operations here in the U.S.," said Intel spokesman William Moss. Approximately 80% of Intel's H-1B hires are recent master's and Ph.D. degree graduates of U.S. universities who are just entering the workforce, he said.
The Dept. of Labor wage levels "appropriately recognize that any assessment of the labor market should take experience and skill level into account when considering wages," Moss said.
Report co-author, Ron Hira, associate professor in the department of political science at Howard University, argues that the visa workers are competing for jobs that U.S. graduates could fill.
"These recent graduates can and should be filling most positions that H-1B employers have assigned as Levels 1 and 2, and they should be prioritized for those positions," Hira said. But since most H-1B employers are not required to advertise H-1B positions "it is unclear whether many U.S. workers are ever afforded an opportunity to apply for these positions."