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Unintended Consequences of the H1-B Visa Program

Are American Workers Adequately Trained to Fill High Tech Jobs?

The word is out that the Trump administration has drafted an executive order to overhaul the H1-B visa program. Even though it is a move intended to protect American jobs from being shifted to workers from overseas – keeping in line with the American-first policies -- it could have unintended consequences for Silicon Valley and American workers in foreign countries. High technology companies claim they need to hire foreigners to fill jobs Americans are not trained to do. The problem is how to provide those skills and still permit American companies to make business decisions based on costs and profits, the foundation of our free-market economy.

The federal government limits the number of H1-B visas to 65,000 every year with 20,000 additional visas for foreign professionals who graduate with a master’s or doctoral degree from a U.S. university. There is little doubt that the current H1-B visa system has strayed from its original intention of hiring workers for highly technical positions – those that tend to command big salaries – in sciences, technology and mathematics at companies like Google and Apple.

These days, many H1-B visas go to outsourcing companies from India like Tata Consultancy and Infosys, which recruit low-wage workers to staff the technology departments of major American firms. Many of the foreign workers are hired to fill jobs in administration, not the sciences. They are hired to manage and back up most of the system’s data; administration of its data networks operations related to its telephones; email and video conferencing; and payroll and financial applications. I am concerned that allowing foreign workers to perform these services is fraught with danger because it provides access to confidential financial and customer information.

On the ethical front, Trump should stop bullying corporate America. Yes, he was elected to save American jobs and move us closer to a full employment economy. But, I do not believe threatening American companies with negative consequences if they don’t comply is the right way to get from “point A to point B.” I’m also afraid of unintended consequences because some foreign companies may turn the tables on American workers and not hire them in the same numbers to retaliate for changes in the U.S. H1-B visa program.

Trump is taking a short-term view of a long-term problem, which is our colleges and universities are not training an adequate number of American students to fill jobs in technology and the sciences to meet the growing needs of American companies. However, no one is addressing the real problem, which is American colleges and universities give preference to foreign students in the admission process, especially publicly-funded institutions. The reason is foreign students pay about four times the tuition of residents of a state. Given the magnitude of state budget cuts for public colleges and universities in the aftermath of the financial recession, foreign students are highly sort out for their financial wherewithal thereby crowding out American students.

On the economic front, we need to make it more attractive for American companies to hire American workers, not replace them with foreigners. Trump should lobby Congress to provide a tax credit to American companies that hire American workers in fields heretofore filled by foreign workers. We already provide tax credits for targeted areas of our economy so this would be consistent with past tax policies.

Blog posted by Steven Mintz, aka Ethics Sage, on February 7, 2017. Follow me on Twitter and “Like” my Facebook page.