On Thursday, the
Senate Judiciary Committee is scheduled to mark up a technical
amendment to the Immigration and Nationality Act as part of a
reconciliation bill that would recapture unused H-1B and immigrant
employment ("EB") visas from previous years. Chief among the
benefits of this reform are that it would increase flexibility in
hiring foreign workers, would reduce the current visa backlog, and
could serve as a basis for future immigration reform, such as a
more comprehensive guest worker bill in 2006.
As the Judiciary
Committee works on language this week, it should stick to the
principle of enhanced flexibility, but with the understanding that
the legislation is only a short-term fix that will need to be made
permanent in the future.
immigration visas are a popular way for companies to hire
high-skilled labor from abroad for domestic operations in the
United States. H-1B visas allow professional, technical, and other
high-skilled immigrants to enter the United States and work. With
an H-1B visa, these workers can stay in the United States for up to
three years, or up to six years with an extension.
65,000 of these workers are allowed into the country each year
through the H-1B program. Over the past three fiscal years (FY
2004-2006), the cap was reached before the end of the fiscal year.
For the current fiscal year, the annual cap was reached before the
end of August. A similar shortage occurred in the mid-1990s, when
demand for high-skilled workers outpaced supply. Congress increased
the cap to 115,000 for FY 1999 and 2000 and then to 195,000 for FY
2001-03. After FY 2003, the cap reverted to 65,000, its previous
In the recent
history of the program, the number of H-1B visas issued in a year
has sometimes fallen beneath the cap. For example, when the economy
cooled because of the recession earlier this decade, the number of
H-1B visas issued decreased as well (see Table 1). Because of a
quirk in current law, any H-1B visa not issued in a given year
effectively vanishes and cannot be issued in a future year.
The Judiciary Committee
provision is problematic for two reasons. First, it unnecessarily
rations the available foreign labor coming into the United States,
which encourages employers looking for foreign workers to take part
in gamesmanship to get the visa slots that they need.
Unsurprisingly, the visa cap is now being reached many weeks before
the start of the fiscal year, as companies that want foreign
workers apply earlier and earlier. Second, current law lacks any
flexibility for hiring foreign workers. In times of economic
slowdown, like in FY 2002, one would expect that the number of
visas demanded would be low compared to the heady tech boom times
of the late 1990s. That, indeed, was the case, but when demand
increased, the cap quickly went from being no impediment to being
The proposal that
the Senate Judiciary Committee is considering this week would help
to alleviate these problems. It has two basic provisions:
authorized but unused H-1B visas could be recaptured and used in FY
2006 or beyond, with a maximum of 60,000 additional visas to be
issued per year. Businesses that wish to avail themselves of these
recaptured H-1B visas could do so for a $500 fee.
In a similar
vein, unused immigrant employment EB visas could be recaptured,
again for a fee of $500. The maximum issued would be an additional
90,000 per year.
Above all, this
proposal would inject significant flexibility into the current law
by allowing the flow of immigrant labor to be driven by supply and
demand, rather than by an arbitrary cap each fiscal year.
Additionally, the proposal would not increase the aggregate number
of visas previously authorized by Congress; it would simply
recapture those that had not yet been issued.
unions and trade associations such as the IEEE-USA will oppose the
proposal, on grounds that it will reduce job opportunities for
Americans or replace American workers with cheaper labor from
abroad. A 2003 study by the Federal Reserve Bank in Atlanta
disputes the notion that foreign professional workers reduce the
wages of American workers.
This research finding makes sense; after all, by law, H-1B visa
holders must be paid market wages.
Naturally, it is
not costless to locate, hire, and document immigrant labor, and
these costs reach upwards of $6,000 per worker.
Given that the Senate Judiciary Committee proposal includes an
additional $500 "recapture fee" per additional visa, the costs to
employers using recaptured visas will rise. Immigrant labor will
actually be more expensive than domestic labor.
the Wall Street Journal observed last August, if companies
were solely interested in hiring cheap labor from abroad to replace
American workers, the H-1B cap would have been met every single
The fact that the number of foreign workers brought in on H-1B
visas has fluctuated is evidence that these workers are
complementing, not replacing, American workers.
foreign guest workers is better than the alternative, accelerating
outsourcing. If U.S. companies are unable to staff their facilities
in America, they will look abroad. Foreign workers employed in the
United States pay taxes in the United States and contribute to the
U.S. GDP. Even if they send some of their earnings back to family
in their home countries (as often is the case), this is preferable
to the job itself leaving the country.
Not the Final Word on Immigrant
keep in mind that the Senate Judiciary Committee proposal is only a
stopgap measure and should not be the final policy change in the
H-1B and EB visa programs. While the proposal would free up an
additional 300,000 or more H-1B visas in coming years, at some
point these will undoubtedly become exhausted as well.
therefore, will need to enact a more permanent fix in the near
future. Such a bill should include a more general guest worker
program, based on a few broad principles:
A more effective
foreign labor policy should be flexible and respond to market
needs. Allowing unused visas to float forward, from years of low
demand to years of high demand, is one type of flexibility.
However, flexibility should not be code for any type of industrial
policy that rewards some industries over others. If Congress
decides to retain the current cap structure, the caps should be
considerably higher than in current law. For example, the H-1B cap
should be at least double the current level and should allow for a
rollover of unused visas from one year to the next.
associated with any immigrant program should be used to reduce the
backlog of cases and otherwise minimize the processing delays that
are often found in these programs. Provisions for admitting the
spouses and children of workers in the U.S. on employment visas
should also be streamlined. These family-related delays make up a
large part of the backlog problem.
No guest worker
or other immigrant labor program should reward illegal behavior by
offering amnesty. Therefore, any illegal or undocumented worker
currently in the United States should have to return to his or her
home country to apply for guest worker status, just like any other
The United States
continues to be the land of opportunity, and immigrants want to
come here to take part in the American Dream. Foreign workers
factor prominently into that philosophy, and Congress should make
sure that America continues to allow productive individuals into
Kirk A. Johnson,
Ph.D., is a Senior Policy Analyst, and Tim
Kane, Ph.D., is Bradley Research Fellow in Labor Policy, in the
Center for Data Analysis at The Heritage Foundation.