H1-B Visa Leaves Americans on the Sidelines

Two notable economists have highlighted what’s making it tougher on middle-aged Americans to land jobs. Irwin Stelzer, writing for the Weekly Standard, and Robert Samuelson, columnist for the Washington Post, show how, despite high unemployment levels for Americans in their 40s, 50s, and 60s, corporate elites would rather import cheap foreign labor to systematically displace these available American workers, who bring tremendous experience, insight, and wisdom to the table.

The not-so-subtle bias predominant in the high-tech sector, combined with a loopy H1-B visa program, increasingly narrow skill demands that block perfectly capable American job candidates, and the fact that it’s harder to land a job if your resume shows long-term unemployment, should cause leaders in the private sector and in government to rethink this problem and find a pro-American solution.

Stelzer observes:

Employers’ requests for the limited number of H1-B visas that allow foreign skilled workers to work and live here has wildly exceeded the supply. After all, the visas allow employers to hire foreigners, rather than bid up wage rates to attract American citizens, or incur the cost of training Americans to do the job. And the visas are free.

That’s the core problem not only with H1-B visas, but guestworker visa programs generally. They tend to serve as tools for many employers to manipulate the labor market to hold wages down and to avoid giving a serious look at Americans. They can use overly narrow job descriptions to keep adaptable American job applicants from consideration. They can skirt age-discrimination laws.

In a free market, where supply of labor and demand for labor naturally move toward balance, if there were a dearth of potential workers then employers would raise pay rates to attract workers. As it is, H1-B allows those companies that more heavily rely on foreign temp workers to avoid considering otherwise employable Americans for the spots.

As Samuelson notes, the broader U-6 unemployment rate stands at 12.7 percent, long-term unemployment (without a job six months or longer) makes up about 36 percent of total unemployed, 60 percent of Americans out of work are 35 or older, and 36 percent worked in professional, managerial, technical, or administrative positions. That’s millions of Americans who want work, but are boxed out. We obviously have a problem in the U.S. labor market for returning these willing native workers to jobs.

Here’s the crux of the situation: America has an excess of available, willing, and able would-be native workers. Immigration laws enable employers to leave these Americans on the sidelines and instead import cheap workers from abroad. Yet, based on native human capital alone, the United States is far from “an economy close to its productive capacity,” as Samuelson puts it.

Instead of putting employer “needs” and jobless Americans in separate silos, the solution should be to align job openings and available Americans who, with a bit of training, could fit the bill. It rests on placing confidence in American ingenuity to fix a domestic problem with a home-grown solution.

Stelzer illustrates the absurdity and falsity of the premise underlying the unlimited visa demands:

It is the position of these high-tech businesses that there is no price that will call forth an additional supply of workers with the needed skills. And that there is no amount of training that will bring any American workers up to snuff. Different from the fracking industry, where highly skilled workers are flocking to jobs in places considerably less appealing than Silicon Valley because six-figure salaries are on offer. Different from the law business, where anticipation of excessive salaries called forth an excess supply of highly schooled workers, and the end of the salary boom has cut the number of men and women willing to invest in three years of expensive training. Different from construction trades, where shortages of skilled workers are driving up wages so that workers unemployed by the Great Recession will return to the labor force. Different from almost every other product and labor market.

Stelzer’s solution? Auction the scarce visas or require a company “to train an American worker for each foreign worker it is allowed to employ. Or pay for such training, and commit to hire the newly skilled worker when the foreigner’s H-1B visa expires.”

It’s been proven ad nauseum that H1-B visaholders really aren’t some superclass of geniuses whose particular skills and talents and intellect high-tech cannot live without. Some, though, do best fit the need, in some instances. So, the answer isn’t zero visas, but it certainly isn’t tens of thousands.

The solution to maintaining access to the real “best and brightest” while harnessing market forces to stop systematically disadvantaging Americans who need employment and are capable of doing the job if given the chance: Limit guestworker visas to a minimal level and award the visas by auction to the highest bidder, with the starting bid at twice the average U.S. wage in the occupation category. Require every winning bidder for a guestworker visa to pay for training an American for that job and, similar to what Stelzer suggests, to hire that American after the training is done. If the employer receives more than five American applications for the same or similar job for which an H1-B visa is sought (or if two or more applicants are age 40 or older), then deny the visa, unless the employer is willing to hire an American and pay him or her at least one and a half times the pay rate of the H1-B worker.

When our policies enable hiring discrimination against American citizens and favor foreigners over our own countrymen, as they do now, then it’s past time to restore sanity to our work visa system and restore opportunity for our fellow citizens.

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