H-1B visas enable businesses to temporarily hire highly skilled
immigrants to fill vital positions. Immigration opponents argue
that workers on H-1B visas are not especially talented, but have
average skill levels. These arguments are based upon a misleading
metric of talent. The education and wage levels of H-1B recipients
demonstrate that they are much needed, highly skilled workers.
Congress should raise the cap on H-1B visas.
H-1B Program for Skilled Workers
Congress created temporary H-1B visas for non-immigrant workers to
prevent a shortage of skilled workers from hurting the economy.
H-1B visas allow foreigners with advanced skills to work in the
United States for three years, and may be renewed for another three
years. After that, these workers must leave the country.
Congress permits U.S. Citizenship and Immigration Services
(USCIS), an agency within the U.S. Department of Homeland Security,
to issue 65,000 H-1B visas per year to workers with at least a
bachelor's degree, and an additional 20,000 to workers with at
least a master's degree. This represents far fewer people than
American high-tech employers need. USCIS received 163,000 employer
applications for these limited visas within a week of accepting
applications for FY 2009, and reached the cap within hours
of accepting applications for FY 2008. Employers are currently
urging Congress to raise the visa cap.
Opponents Claim H-1B Workers Not Highly
Opponents of expanded legal immigration have claimed that H-1B
workers are not, in fact, highly skilled workers. The Center for
Immigration Studies (CIS) recently issued a report claiming that
most H-1B workers are not the "best and the brightest," but of
merely average talent.
The CIS came to this conclusion by examining data on H-1B
workers whose employers sponsored them for permanent residency. The
government requires companies to pay H-1B workers at least the
prevailing market wage for workers in their occupation with their
experience level. Companies sponsoring a worker for a green card
must report both the prevailing wage and the actual wage they pay
the employee. The CIS found that most H-1B employers pay workers
market wages. H-1B workers do not earn substantially more than
other workers in their occupations. On this basis the CIS concluded
that H-1B workers are not of extraordinary ability, but are of
average skill levels.
This claim relies on a highly misleading measure of ability. Most
employees with H-1B visas work in occupations that require advanced
skills, such as computer and mathematics. The fact that H-1B
workers earn wages comparable to those of their highly skilled
co-workers does not mean that they are average workers or lack
advanced skills. Looking at the objective skill levels of H-1B
workers, instead of their skills relative to their highly skilled
colleagues, provides an accurate assessment of their talent.
H-1B workers have much more education than the typical American
worker. With only a few exceptions, an employee must have the
equivalent of a bachelor's degree to qualify for an H-1B visa. Many
have much more education. Chart 1 shows the education levels of
H-1B visa workers compared with U.S. workers. Virtually no H-1B
employees have less than a bachelor's degree; and 31 percent have a
master's degree, compared with just 6 percent of American workers.
Twelve percent of H-1B workers have a doctorate, compared with 1
percent of American workers.
H-1B workers also earn high wages because of their high skills.
The Heritage Foundation examined the wages of H-1B workers using
the same data that CIS used. Table 2 shows the distribution of wages for
full-time private-sector workers in the economy, and for H-1B
workers using these data.
The median H-1B employee earns $74,250 a year-90 percent more
than the median private sector salary of $39,100. The average H-1B
salary of $78,600 is 50 percent above that of the average U.S.
worker's of $50,300.
Some critics contend that major corporations do not face a
talent shortage, and want the H-1B cap lifted so they can employ
inexpensive foreign labor that undercuts the wages of American
employees. This is false. The law requires employers to pay at
least what equivalently skilled U.S. workers would earn. Table 2
shows that major U.S. corporations pay H-1B employees substantially
above-average wages. Typical salaries for H-1B workers at these
companies range from $80,000 to $110,000 a year. At these wages,
employers are not seeking cheap foreign labor. They are seeking
highly skilled workers with the talents they need to expand and
compete in the global marketplace.
Good for the Economy
The advanced skills of H-1B workers enable companies to grow. When
a company cannot hire a highly skilled worker, it is not only that
worker who does not get a job. Other employees whom the business
would have hired as part of that expansion also lose out.
Consider a hardware company that cannot hire key engineers to
design a new product because of the H-1B shortage. Those workers do
not get a job; nor do the workers who would have manufactured the
product; nor do those who would sell it. Each H-1B employee at a
high tech company supports the jobs of four American workers. By
keeping the H-1B cap artificially low, Congress costs hundreds
thousands of workers their jobs at a time when the economy is
Raising the H-1B cap would also raise tens of billions of
dollars in new revenue for the government without a harmful tax
increase. Because H-1B workers are highly compensated, they pay
high taxes. Heritage Foundation calculations show that raising the
H-1B cap to 195,000 visas would raise $69 billion in new tax
revenue over eight years. This is a much better source of revenue for
PAYGO offsets than raising taxes, which cause economic losses and
are especially inappropriate in a time of economic stress.
Contrary to the claims of immigration opponents, H-1B workers are
highly skilled workers with vitally needed skills. H-1B workers are
highly educated. Almost half have an advanced degree. The median
H-1B worker earns 90 percent more than the median U.S. worker. They
are in no way average workers.
James Sherk is
Bradley Fellow in Labor Policy in the Center for Data Analysis at
The Heritage Foundation.
Employees of universities are also exempt from the annual cap; H-1B
visa renewal does not count against the cap.
Data on the education of H-1B workers come from U.S. Department of
Homeland Security, Office of Immigration Statistics,
"Characteristics of Specialty Occupation Workers (H-1B): Fiscal
Year 2003," November 2004, Table 10, at /static/reportimages/CC34A8D0700A5A9BF32061312C509494.pdf.
This is the most recent report examining the education of H-1B
workers. Data on all U.S. workers come from the March 2004
Current Population Survey, conducted by the Bureau of Labor
Statistics. U.S. workers are U.S. citizens between the ages of 25
and 65 who work at least 35 hours a week in the private sector and
are not self-employed.
Department of Labor, Office of Foreign Labor Certification, Foreign
Labor Certification Data Center Online Wage Library, Permanent
Program Data, at http://www.flcdatacenter.com/
CasePerm.aspx. Data are for 2007. Workers were considered
H-1B employees if their current visa is an H-1B visa and their
application for permanent residence was not denied or withdrawn.
Note that these data differ from wage information provided in Labor
Condition Agreements for two reasons. First, the data included the
actual wages that employers pay their workers, not the minimum
prevailing wage level they are required to. Second, the data only
includes the wages of H-1B workers whose employers sponsor them for
a permanent residence, which may be higher than the wages of all
Data on the wages of U.S. workers come from the Department of
Labor, Bureau of Labor Statistics, March 2007 Current Population
Survey. U.S. workers are U.S. citizens between the ages of 25 and
65 who work at least 35 hours a week in the private sector and are
not self-employed. Since the March CPS reports wages and salary
income for the previous year, these data come from 2006 and are
inflation adjusted to 2007 levels using the CPI-U-RS.