The April Fool is anyone who reads Alex Nowrasteh’s column about H-1B guest-workers and believes his bunk. If he had actually read the paper he cites about the effect of H-1B workers on American productivity he’d know that his claims are ludicrous. The paper doesn’t find that H-1B workers “have increased American productivity by 10 to 25 percent from 1990 to 2010”; it makes that estimate for the entire foreign STEM workforce, which includes one hundred thousand foreign students in the Optional Practical Training program who graduated with STEM degrees from U.S. schools, L-1 visa holders, and 300,000 permanent residents, as well as H-1Bs.
Nowrasteh admits that the United States issues only 85,000 H-1B guest-worker visas a year for private sector jobs. But about half of them are in entry-level information technology (IT) jobs, where they can have little effect on the productivity growth of a $16 trillion economy with a labor force of 150 million workers and a STEM workforce that includes 6.2 million scientists and engineers. What exactly are the spectacular innovations produced by H-1Bs? Nowrasteh doesn’t tell, because he can’t. Nine of the top 10 users of H-1B visas are firms mainly in the business of IT outsourcing – and nearly all of them are body shops that supply lower paid IT workers to replace U.S. workers, often with the goal of moving the operations offshore, usually to India.
The recent case of Southern California Edison (SCE) exemplifies the primary role of H-1Bs in the economy. SCE laid off 500 of its own IT employees and hired two Indian outsourcing firms (which together used more than 12,000 H-1B visas last year) to replace them. The H-1Bs – paid $65-70,000 a year – replaced U.S. workers who were paid on average $110,000. The experienced U.S. workers were forced to train their guest-worker replacements. The only economic “benefit” the H-1Bs brought was lower wages.
Nowrasteh isn’t satisfied with misstating the paper on productivity growth mentioned above. He also misstates Charles Johnson’s work on gross domestic product (GDP) growth in the U.S. economy; Nowrasteh either didn’t read it or didn’t understand it. First, Johnson wasn’t writing about wages, but rather about GDP per capita. (Nowrasteh might not know the median hourly wage in the U.S. increased only 14 cents from 2000 to 2013 even as GDP per capita increased.) And Johnson’s modeling exercise was about how ideas are shared around the world and translated into production. Specifically, the research and development intensity he describes is not in the United States alone, but in the G-5 countries. Here is the actual conclusion that Nowrasteh misstates:
“The rising level of educational attainment accounts for more than one-third of growth and increased research intensity in the G-5 countries accounts for about 50 percent of growth.”
Nowrasteh suggests changes in the H-1B visa program, but they don’t include prohibitions against using the visa to replace U.S. workers or to cut wages. H-1B workers are not what Nowrasteh calls them. They are not “skilled immigrants,” as he well knows. By law, they are non-immigrant, temporary workers, and most of them are employed not by small, innovative start-ups or even by the Silicon Valley giants, but are instead employed by Tata, Infosys and other outsourcing firms that offer low-cost alternatives to U.S. citizens or permanent resident immigrants. In 2013, Tata and Infosys together sponsored only 7 of their 12,432 H-1Bs for permanent residence.
Alex Nowrasteh is a completely unreliable source of information. If readers of The Hill want to understand the H-1B program, they should read the testimony of Prof. Ron Hira, Prof. Hal Salzman, or Jay Palmer at the recent hearing of the Senate Judiciary Committee.
And finally, I should add one more thing Nowrasteh got wrong. It was a New York Times headline writer who used the words “genius glut,” not I. Producing or attracting geniuses can only be a good thing, and I objected to the headline when I saw it.
Eisenbrey is the vice president of the Economic Policy Institute, a think tank in Washington D.C. You can follow him on Twitter at @RossEisenbrey.