June 09, 2014Ayush Soni
The influx of foreign-born scientists, technology professionals, engineers, and mathematicians to American cities appears to IMPROVE the salaries of both college-educated and non-college educated workers, while causing no harm to local employment conditions.
That’s the bottom line of a new study on the effects of H-1B visas granted to STEM (Science, Technology, Engineering, and Mathematics) workers that was conducted by the National Bureau of Economic Research.
The study adds urgency to the immigration policy debate that has stalled in Congress, even as high-tech businesses tell Washington that without more H-1B visas they won’t be able to get the workers they need to innovate, produce, and grow. While the vast majority of these companies’ domestic workers are Americans, access to foreign talent gives these employers the ability to attract and retain the very top students graduating from U.S. universities with degrees in engineering regardless of the graduates’ origin. Companies rely on the H-1B visa to sponsor non-citizens to work for their companies on a temporary basis. They also have the option to apply for employment-based immigrant visas, known as green cards, for their workers if they want to keep the workers permanently. Unfortunately there is a dire shortage of both these visas, which limits the U.S. employers’ access to top talent and results in a huge backlog for those in line for the green cards.
Two of the most common arguments against increasing the H-1B visa cap are that foreign workers bring down wages and lower American employment. However, the NBER study, by Giovanni Peri, Kevin Shih, and Chad Sparber, puts these myths to rest. In their recently published paper, Foreign STEM Workers and Native Wages and Employment in U.S. Cities, the researchers show that an increase of one percentage point in the number of foreign STEM workers increases wages of local native workers. The increase is 7% to 8% for college graduates and 3% to 4% for non-college graduates. They also show that the increase in STEM foreign workers made no difference on the total employment for native workers. The study found that H-1B workers’ talents and job types improve innovation and technology, resulting in an overall increase in company productivity and an overall increase in wages.
Instead of holding back Americans, H-1B workers actually help improve their productivity, and in turn, their wages—a conclusion that bolsters the case for quick passage of immigration reform. We must fully maximize this effect by matching the H-1B cap to company demand, in contrast with the obstructively low level of the current cap. Fortunately, both the Senate’s comprehensive immigration bill, S. 744, and the House’s SKILLS Visa Act, H.R. 2131, would increase the cap. It’s time for Congress to complete work on this critical legislation.
It’s important to remember that what improves both U.S. technology and the wages of people working for and around tech industries are these STEM skills, regardless of origin of the person who has them. And to increase the number of Americans with the required STEM skills, which would help companies rely less on foreign talent, the private sector advocated for a STEM Fund provision in the Senate and House bills that would come from increased immigrant visa fees. This hike in fees would go toward improving STEM education and opportunities for American students. Any immigration bill concerning high-skilled visas should address short-term needs by increasing visa caps., and also address long-term needs by increasing investment in STEM education in America.
Learn more about the ENBR study here.
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