By Eleanor Pelta, AILA First Vice President

The latest salvo in the war against H-1B workers and their employers (and this time, they’ve thrown L-1’s in just for fun,)  is the Economic Policy Institute’s briefing paper by Ron Hira, released last week,  which concludes that the practice of using H-1B and L-1 workers and then sending them back to their home countries is bad for the economy.  While Hira’s findings are certainly headline-grabbing, the road that Hira takes to get there is filled with twists, turns and manipulations and simply lacks real data.
Hira starts with the premise that some employers use H-1B’s and L visas as a bridge to permanent residence, and some employers use those categories for temporary worker mobility. (His particular political bent is belied by his constant usage of the term “guest-worker status”—a term that brings with it the politically charged connotations of the European guest worker programs for unskilled workers—for  the practice of bringing H-1B’s and L’s in to the U.S. on a temporary basis.)  After examining his “data,” he divides the world of employers into two broad categories:
·         Bad guys (generally foreign employers, no surprise, or U.S. employers with off-shore companies in India) that bring in H-1B and L workers for temporary periods, exploit them, underpay them and send them home after they get training from the American workers whose jobs they will outsource when they return home
·         Good guys (U.S. corporations –Hira uses the more genteel label, “firms with traditional business models”) that bring H-1B and L workers to the U.S., pay them adequate wages, and sponsor them for permanent residence, thereby effecting a knowledge transfer to American colleagues that is good for the economy
Hira’s tool, a statistic he calls “immigration yield,” is simply a comparison of H-1B and L usage and the number of PERM applications filed by the highest users of those visas. He essentially concludes that because the highest users of H-1B’s and L’s are Indian consulting companies, and these companies have only a minimal number of PERM’s certified, they are using H’s and L’s as cheap temporary labor.  He is unable to explain away the high number PERM filings of one of the IT consulting companies, and so he addresses this anomaly by saying “part of the explanation might be that it is headquartered in the United States.”
There are too many things wrong with this analysis to list in this blog, but here are a just a few ways in which Hira’s study is problematic:
  • Hira’s clear implication is that companies that don’t sponsor H-1B’s and L’s for PERM are using these workers instead of more expensive American labor.  He ignores that fact the H-1B program has rules in place requiring payment of the prevailing wage to these workers. But even worse, he has not presented any data whatsoever on the average wages paid to these workers. He also doesn’t address the expense of obtaining such visas. He simply concludes that because they are here temporarily, they are underpaid.
  • Hira makes the argument that companies who use H-1B and L workers as temporary workers generally use their U.S. operations as a training ground for these workers and then send then back to their home countries to do the job that was once located here.  Again, this assertion is not supported by any real statistical data about, or serious review of, the U.S. activities of such workers, but rather by anecdotal evidence and quotes from news stories taken out of context.
  • With respect to the fact that the L-1B visa requires specialized knowledge and so would normally preclude entry to the U.S. for the purpose of gaining training, Hira cites and outdated OIG report that alleges that adjudicators will approve any L-1B petition, because the standards are so broad. Those of use in the field struggling with the 10 page RFE’s typically issued automatically on any specialized knowledge petition would certainly beg to differ with that point.
  • Hira clearly implies that American jobs are lost because of H-1B and L “guest workers,” but has no direct statistical evidence of such job loss.
The fact is that usage of H-1B and L visas varies with the needs of the employer. Some employers use these programs to rotate experienced, professional workers into the United States and then send the workers abroad to continue their careers. Some employers bring H-1B’s and L’s into the U.S. to rely on their skills on a permanent basis.  Judging from the fraud statistics as well as DOL enforcement actions, the majority of employers who use H-1B workers pay these workers adequate wages and comply with all of the DOL rules regarding use of these workers, whether the employers bring them in for temporary purposes or not.  By the same token, the minority of employers who seek to abuse H and L workers may well do so, whether they intend to sponsor them for permanent residence or not.  Indeed, arguably, the potential for long-term abuse is much worse in the situation in which a real “bad guy” employer is sponsoring an employee for a green card, because of the inordinate length of time it takes for many H-1B and L workers to obtain permanent residency due to backlogs.

 

Hira does make that last point, and it is just about the only one we agree on.  Congress needs to create a streamlined way for employers to access and retain in the U.S. foreign expertise and talent, without at 10-15 year wait for permanent residence. But our economy still needs the ability for business to nimbly move talent to the U.S. on a temporary basis when needed, or to rotate key personnel internationally.  In a world where global mobility means increased competitiveness,  Hira’s “statistics” simply don’t support elimination of these crucial capability.