October 2007, Volume 14, Number 4
H-1B, Labor, Trade
DHS reported that 821,006 temporary foreign workers were admitted in FY06, up from 726,535 in FY05; these data double-count individuals admitted several times. There were 435,100 H-1B admissions and 320,829 intra-company transfers with L-visas. DHS groups H-2A and H-2B admissions together, and reported 180,503 admissions in FY06, up from 129,327 in FY05. Finally, there were 104,975 admissions under visa programs for artists, entertainers, athletes, educators, scientists and workers accompanying them.
The H-1B program, created in 1990, allows the admission of 65,000 foreign professionals a year to fill US jobs that require a college degree. In addition, 20,000 visas a year are available to US-educated foreigners with Masters or PhDs from US universities, and an unlimited number of H-1B visas are available to universities and nonprofits (28,000 were issued to universities and nonprofits in one recent year).
H-1B visas are good for three years and can be renewed for another three years, so that there are likely to be over 700,000 foreigners in the US with H-1B visas at any one time.
It is easy for most US employers to employ H-1B workers, provided that visas are available. Employers file Labor Condition Applications (LCAs) specifying the prevailing wage they will pay the H-1B visa holder and certifying that there is no strike; DOL approval is virtually automatic. The prevailing wage is the median for US workers in the occupation and area, and can come from an external source, the employer's records or DOL data.
The US Department of Labor classifies the jobs for which H-1B workers are sought into four levels based on the skills required. Over half of the LCAs filed in recent years have been for the lowest-skill level, Level 1, meaning that the job requires a BA degree and the wage is 15 to 20 percent of the median wage in that occupation. The median wage for new H-1B workers in IT was $50,000 in 2005.
The Bureau of Labor Statistics' Occupational Employment Statistics (OES) reports median wages by occupation. In 2005, over 90 percent of the prevailing wages specified by employers in LCAs requesting H-1B workers offered wages below the median US wage for that occupation and area. The median age of H-1B holders is 27.
Senators Bernie Sanders (I-VT) and Chuck Grassley (R-IA) have proposed legislation that would require that all US employers filing LCAs for H-1B workers certify that they have not laid off 50 or more US workers (in firms with at least 100 employees) during the previous 12 months.
The IT industry wants to increase the number of H-1B visas to at least 115,000 a year, with no changes in requirements. On September 11, 2007, 13 governors sent a letter to Congressional leaders asking them to raise the cap on the number of H-1B visas available, citing the fact that the 65,000 H-1B visas available for FY 08 were used up on the first day they were available.
Many H-1B visa holders want to become legal immigrants. The US has five types of immigrant visas for foreigners desired by US employers, and the most relevant for H-1Bs is the so-called EB-3 visa, generally available to foreigners with at least a BA (EB-1 is for foreigners with "extraordinary ability" and EB-2 is for foreigners with "advanced degrees"). There is little or no wait for EB-1 and EB-2 visas, but there is a wait for EB-3 visas, especially for nationals of China and India because the country ceiling of 20,000 that applies to every[AS1] country, regardless of the size of its population.
Labor. Pew released a study in August 2007 that found foreign-born Latinos accounted for 36 percent of US workers earning less than $8.50 an hour in 2005 ($7.69 in 1995). In 1995, foreign-born Latinos were over 40 percent of low-wage US workers, and Pew attributed their declining share to the fact that a larger proportion are employed in construction.
Average inflation-adjusted income was $55,238 in 2005, slightly less than the $55,174 in 2000.
Business Week on August 21, 2007 quoted David Rosenberg of Merrill Lynch asserting that there was no shortage of workers, only a shortage of wages. Rosenberg noted that the labor force participation rate dropped between 2000 and 2007. If the same share of Americans were in the labor force in 2007 as in 2000, but employment was at 2007 levels, the unemployment rate would be 5.8 rather than 4.6 percent.
The US has been adding jobs at the top and bottom rungs of the education ladder, which means that more jobs require college degrees and more do not require a high-school diploma. In 1980, about 13 percent of US jobs were in personal services, which often require little education; by 2005, 20 percent of US jobs were in personal services.
Trade. The US negotiated free-trade agreements with Panama, Peru, Colombia and South Korea. The Colombia and South Korean deals are not expected to be approved by Congress despite Bush administration pledges to add labor and environmental safeguards to future free trade agreements. These four FTAs were approved before the president's fast-track negotiating authority expired June 30, 2007. Congress can vote only to approve or disapprove fast-track agreements; it cannot amend them.
The Pew Global Attitudes Project, which surveyed 45,000 people in 46 countries, reported that large majorities everywhere said that trade was a good thing, but many people worry about trade's side effects on their culture and the environment. In the US, the share of respondents agreeing that trade is a good thing dropped from 78 percent in 2002 to 59 percent in 2007. Majorities said that more should be done to protect the environment even if the result is "slower economic growth and some loss of jobs."
The survey asked about immigration, and large majorities in nearly every country favored tougher restrictions. Americans and Canadians, as well as British and French respondents, agreed that it is good that foreigners enter and work. However, in Italy and Germany, two-thirds of respondents said that immigration was mostly bad for their countries.
Tony DiRomualdo, "Are America's software skills getting soft?" Wisconsin Technology Network, October 6, 2007. Krissah Williams, "Temp Firm Specializes in Vetting Immigrants' Work Status," Washington Post, August 29, 2007.