H-1B Proposed Rule Moves Forward, Flunks Economics 101

U.S. Citizenship and Immigration Services announced last week it sent a proposed rule to the Federal Register radically changing how it selects H-1B temporary professional workers. The H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, however it has now expanded far beyond that, often to the detriment of U.S. workers. Data shows that the more than a half million H-1B nonimmigrants in the United States have been used to displace U.S. workers. This has led to reduced wages in a number of industries in the U.S. labor market and the stagnation of wages in certain occupations. These latest efforts on H-1B visas are part of a larger Trump Administration goal to protect American workers.

“We have entered an era in which economic security is an integral part of homeland security. Put simply, economic security is homeland security. In response, we must do everything we can within the bounds of the law to make sure the American worker is put first,” said Acting Secretary Chad Wolf. “The Department of Homeland Security is honored to take this important step toward putting Americans first and to continue to implement President Trump’s agenda to keep our economy secure.”

This rule will combat the use of H-1B workers to serve as a low-cost replacement for otherwise qualified American workers.

The new rule will:

  • Narrow the definition of “specialty occupation” as Congress intended by closing the overbroad definition that allowed companies to game the system;
  • Require companies to make “real” offers to “real employees,” by closing loopholes and preventing the displacement of the American worker; and,
  • Enhance DHS’s ability to enforce compliance through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved.

Stephen Yale-Loehr, professor of immigration law at Cornell Law School and co-author of a leading 21-volume immigration law series, says that though the rule is premised on preserving jobs for U.S. workers, it overlooks the economic benefits of high skilled foreign workers. If you’d like to connect with Prof. Yale-Loehr about this development please contact him directly at 607-379-9707 or SWY1@cornell.edu

Yale-Loehr says:  “The rule would scrap the current random selection system and instead select H-1B workers based on their salaries. The highest paid workers would be allowed to file an H-1B petition; workers offered lower salaries might not be able to file a petition if more than 85,000 higher paid H-1B workers filed petitions first. Current H-1B regulations already require employers to pay the higher of the actual or prevailing wage for similarly situated U.S. workers. Thus, it is hard to know what more the proposed rule would do.

“By effectively increasing salaries for H-1B workers, the proposed rule would harm all employers trying to hire foreign temporary professional workers, but especially schools, startup companies, and smaller companies that cannot afford to pay the high salaries that Silicon Valley and other big companies offer. 

“The rule is premised on preserving jobs for U.S. workers. However, the rule fails to understand that many nonimmigrant workers, especially high skilled foreign workers, help grow the economy. For example, one study found that every H-1B worker creates about five jobs for U.S. workers in the technology sector.  “The new proposed rule may score points with the President’s political base, but it flunks Economics 101.”

(By Cornell University)

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