Universities are lobbying against a White House reform that will likely provide jobs and higher salaries to hundreds of thousands of their American graduates.
President Donald Trump’s October 28 reform changes the rules in the H-1B program that keeps at least 600,000 H-1B workers in the white-collar jobs needed by American graduates.
The H-1B program annually delivers 85,000 visa workers to U.S. companies. Under current rules, the visas and workers are allocated to U.S. companies by an annual lottery, regardless of promised pay or employee’s skill. But Trump’s reform would provide the visa workers to the companies that promise to pay the highest salaries.
This is a “dramatic change [and] our communities, economy, and country will lose,” complains a university trade association, titled the Presidents’ Alliance on Higher Education and Immigration. The group argues that foreign students will not pay tuition to the U.S. universities if they are priced out of the H-1B program — which provides a long pathway to the huge reward of American citizenship.
The pathway starts at the universities, which provide fee-paying foreign students with the documents they need to get free work permits via the federal Optional Practical Training (OPT) and Curricular Practical Training (CPT) programs.
In 2019, roughly 500,000 foreign graduates and students of U.S. colleges paid out-of-state fees to get the work permits that allow them to compete for jobs needed by the American graduates of those universities.
Many of the foreign graduates take starter jobs as gig-workers for Fortune 500 subcontractors, so excluding Americans from valuable career tracks.
The OPT and CPT workers are willing to work for long hours at meager wages because they are competing for one of the 85,000 new H-1B visas allocated each year to companies. They want to get into the H-1B program because it allows them to be nominated for green cards by their employers, and also to get unlimited extensions of their temporary visas. Once the OPT workers get into the H-1B program, they must work for several additional years before their employers finally pay them with the green cards that allow them — and their children — to become American citizens.
The OPT-to-green-card pipeline now includes more than one million foreign graduates working in various visa programs, including the H-1B, OPT, J-1, L-1, E-3, and TN worker pipelines. This little-noticed green-card workforce helps to push down salaries for millions of American graduates — including the millions of American graduates from the universities in the Presidents’ Alliance lobby group. From 2016 to 2019, the median or midpoint income of college graduates fell by two percent, according to a survey released in September by the Federal Reserve banking system.
— Neil Munro (@NeilMunroDC) November 2, 2020
Trump’s October 28 reform would force companies to raise wages for H-1B workers and indirectly encourage the companies to hire Americans, often at higher wages. But if many foreigners are priced out of the reformed H-1B program, many will decide to not pay U.S. universities for the documents needed to get the CPT and OPT work permits.
“The proposed rule is unsound policy, not supported by statute, and will serve only to further undermine the ability of our colleges and universities to recruit and retain international students,” complained Miriam Feldblum, executive director of the Presidents’ Alliance trade group. She continued:
Part of the attraction for international students to come study in the United States are the potential opportunities to then gain practical work experience in the United States. H-1B visas serve as a critical pathway for these students. The proposed rule will block these opportunities by imposing a system that grants H-1B petitions based on the highest salary first, locking out many new international graduates of U.S. colleges and universities.
The new rule will break the universities’ lucrative foreign-labor pipeline, says Kevin Lynn, founder of U.S. Tech Workers. He continues, “Yeah, [Feldblum’s letter] is as good as them coming out and saying, ‘We need the cheap labor.’ We know this is the racket, yes, this is the tuition-to-green-card racket! This demonstrates that these [foreign] students are paying full freight and more, not for an education, but for a green card.”
The alliance members’ universities include Duke, Wake Forest, Dartmouth, Princeton, Rutgers, Seton Hall, Barnard, CUNY, Columbia, Cornell, Hofstra, New York, Vassar, Oberlin, Carnegie Mellon, Drexel, and Evergreen.
Lynn continued: “American productivity, and opportunities for Americans, and the education and skills training of Americans, have suffered directly from this pipeline of cheap labor. So, consequently, when the pipeline gets broken, you’re going to see more educational and training opportunities for Americans. You’re going to see more work and employment opportunities for Americans. It goes from a destructive cycle to a virtuous cycle.”
The Wall Street Journal reported November 2:
Jagadishwar Sirigiri received approval for three H-1B applicants to join his Massachusetts-based company just weeks before the new wage rules took effect. Bridge12 Technologies Inc., which Mr. Sirigiri founded 11 years ago and partially bootstrapped with his own money, builds advanced high-frequency microwave systems used by the Defense and Energy Departments and the National Institutes of Health, among other customers. Mr. Sirigiri said he is constantly struggling to find qualified workers.
He said he likely can’t pay the higher salaries and will focus on hiring less-qualified U.S. residents and training them on the job, and hope they stick around.
The H-1B program also undermines U.S. national security because it delivers cutting-edge commercial and military technology to the nation’s rivals, said Lynn. “If you want to see your IT fly away to other countries, to be eventually be used against you, either competitively or impacting national security, then continue the H-1B program, continue to bring foreigners into jobs, continue to install them in American companies, and yes, you will have technology transfer abroad. But create opportunities for Americans here, who are trained, and yes, they’ll be a little more expensive — but in the long run, the company’s productivity will improve, and our national security will improve, and our competitiveness will improve.”
When asked about the universities’ desire to protect their pipelines, Trump’s deputies diplomatically sidestepped the issue during an October 31 press conference.
“We’re not trying to interrupt the pipeline,” said Ken Cuccinelli, the acting deputy secretary at the Department of Homeland Security. He continued:
But we are trying to return the H-1B system to what was originally intended decades ago, of bringing in the best and the brightest. It was not ever viewed at that time as something where you would be hiring entry-level participants in the economy. These were intended to be specialized people with unique skills and so forth, as opposed to exactly what you described is a problem.
The H-1B program’s existence should not compete with Americans coming out of college looking for their first job. It was never intended to be that way …. [The pending regulation] is intended to improve the lot of American workers in any of the industries touched by H-1B, that is certainly a goal.
I would not say that there’s any intention to interrupt or interfere with universities’ marketing to potential students or anything of that nature. We certainly do want to see students coming out of universities — American students coming out of universities — with a clear shot at work that had been being undercut by the abuse of the H-1B system in the past.
Joseph Edlow, the deputy director of the U.S. Citizenship and Immigration Services agency was more direct:
The abuses of the H-1B program and its overreliance on relatively lower-paid H-1B workers has really led to a reduction in wages for the U.S. labor market in several industries. It has really led to a stagnation of wages in certain occupations, including in the IT field where we’re seeing significant growth in the H-1B workers that are applying and petitioning for in that field. The U.S. workers are only growing by a fraction of a percent at the same time. The administration is really taking strong measures to protect and address the concerns of U.S. workers and those that are here working … as permanent residents.
Employers are protesting the new visa allocation policy, and are saying it will drive up corporate costs.
It’s “horrifying, truly,” says Susan Cohen, the founding chair of the immigration practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, a law firm in Boston. She notes that the wage-scale changes alone affect a variety of visa holders from H-1B, H-1B1, and E-3 visas … “It’s going to be a shock to employers.”
Cohen suggests that the DOL wage-scale changes, which range from level 1 for entry-level workers to level 4 for seasoned professionals, could make hiring foreign workers too expensive for some employers that now rely on the program.
Universities are also complaining about the increased salaries they would have to pay H-1B workers that they hire. For example, an October 20 statement from Stanford University said:
The new [October 8] rules would limit the Stanford positions that are eligible for H-1B visas and in many cases would make it economically infeasible to hire the much needed skilled people who might still be eligible for a visa. It could affect the approximately 630 members of the Stanford community – primarily researchers – who are here on H-1B visas, as well as 85 H-1B visa holders at SLAC. It would also affect about 80 people who are in the process of applying for and attaining H-1B visas to work at Stanford.
The number of Americans who are ready and willing to accept jobs at Stanford University is quite high.
Joe Biden’s 2020 plan promises to let companies import more visa workers, let mayors import temporary workers, and allow an unlimited flow of foreign graduates through U.S. universities into white-collar jobs. Biden would “exempt from any cap [the] recent graduates of Ph.D. programs in STEM fields,” the plan says.
— Neil Munro (@NeilMunroDC) October 29, 2020
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