Industry Market Trends

Do H-1B Visas Really Bring the Best and Brightest to U.S.?

Mar 11, 2013

H-1B visas are meant to attract the "best and brightest" to American shores, but a new paper contends that the H-1B visa program is not making U.S. companies more innovative and, in some ways, is making them less so.

Credit: Salvatore Vuono at Credit: Salvatore Vuono at

Many high-tech companies insist they need more H-1B visas for foreign workers to ensure access to the best and brightest workforce. Yet a new study published by the Economic Policy Institute (EPI), a liberal-leaning think tank, says there is no evidence that those granted H-1B visas offer exceptional talents.

Businesses in the U.S. use the H-1B program to temporarily employ foreign workers in specialty occupations that require theoretical or technical expertise in fields such as science, engineering, or computer programming. The H-1B visa is most commonly used by foreigners to enter the U.S. science and engineering workforce, according to the National Science Board's latest Science and Engineering Indicators. Although H-1B visas are not issued exclusively to scientists and engineers, the bulk of visa recipients work in science, technology, engineering, and mathematics (STEM) occupations.

The new EPI study, titled Are Foreign Students the 'Best and Brightest'? Data and Implications for Immigration Policy, claims that imported tech talent is no more distinguished than American counterparts.

Authored by Norman Matloff, professor of computer science at the University of California-Davis, the study compared STEM worker salaries, rates of Ph.Ds awarded, doctorates earned, and employment in research and development (R&D) between Americans and foreigners to determine whether those admitted to the U.S. under the H-1B visa program have skills beyond those of Americans.

For instance, the study examined patents awarded to both American and foreign workers. Among computer science workers, on average, former foreign students are producing about half a patent application fewer per person than are Americans of the same age and education level. In electrical engineering, former foreign students' patenting activity is not significantly different from that of American students.

Meanwhile, looking at the proportions of U.S. workers employed in R&D positions versus immigrant workers who hold such jobs, the study indicated that in both computer science and electrical engineering, the foreign former students are significantly less likely to work in R&D compared to Americans of the same age and educational background.

"Compared to Americans of the same education and age, the former foreign students turn out to be weaker than, or at most comparable to, the Americans in terms of salary, patent applications, Ph.D. dissertation awards and quality of the doctoral program in which they studied," Matloff wrote. "The industry has emphasized that it needs foreign workers in order to keep its innovative edge over other countries, yet the data show that the former foreign students are significantly less likely to work in R&D than the Americans.

"In other words," Matloff continued, "H-1B and related programs are not raising U.S. levels of talent and innovation in the tech fields, and are in some ways reducing them."

Questions About Veracity of Usage

The technology industry, which has long depended on foreign-born workers, sees it differently, insisting on the H-1B program's importance based on a shortage of tech talent in the U.S., largely due to a lack of students graduating in STEM disciplines.

As such, demand for H-1B visas typically exceeds supply each year. Currently, the U.S. restricts H-1B temporary work visas to 65,000 annually, with 20,000 exemptions for students earning U.S. master's degrees or doctorates and further exemptions for hiring in U.S. academic and research institutions. For fiscal year 2013, the U.S. Citizenship and Immigration Service (USCIS) began accepting H-1B visa applications on April 2, 2012. By June 11, 2012, the USCIS received a sufficient number of petitions to reach the statutory cap for the fiscal year.

Microsoft, one of the nation's heaviest users of H-1B visas, has cited difficulty finding qualified STEM workers to fill open positions as a reason why it advocates aggressively to allow more high-tech workers into the U.S. under H-1B visas.

"The United States faces a growing economic challenge - a substantial and increasing shortage of individuals with the skills needed to fill the new jobs the private sector is creating. Throughout the nation and in a wide range of industries, there is an urgent demand for workers trained in the STEM fields ... yet there are not enough people with the necessary skills to meet that demand," Brad Smith, Microsoft's general counsel and executive vice president, wrote on the company's blog. "Our nation faces the paradox of a crisis in unemployment at the same time that many companies cannot fill the jobs they have to offer. In addition to the short-term consequences for businesses and individuals, we risk these jobs migrating from the U.S., creating even bigger challenges for our long-term competitiveness and economic growth."

Foreign workers make up about 10 percent of Microsoft's U.S. workforce.

While many proponents of H-1B visas argue that tech firms are unable to find qualified U.S. applicants for STEM positions, detractors say companies aren't doing enough to take advantage of the talent at home.

"[T]ech employment rates still haven't rebounded to pre-recession levels ... and from 2001 to 2011, the mean hourly wage for computer programmers didn't even increase enough to beat inflation," Mother Jones, a nonprofit news organization, notes of EPI findings.

According to Ron Hira, an immigration expert who teaches at the Rochester Institute of Technology, there are two reasons some firms hire H-1Bs instead of Americans: "1) an H-1B worker can legally be paid less than a U.S. worker in the same occupation and locality; and 2) the H-1B worker learns the job and then rotates back to the home country and takes the work with him."

While industry has denied underpaying H-1B workers, the question of whether H-1B visa holders are paid less than comparable Americans has been the subject of controversy ever since the federal H-1B visa program was established in 1990. According to the EPI findings, H-1B visa holders are approved to be hired at wages below those paid to U.S.-born workers for comparable positions.

In the EPI's examination of the presumed correlation between talent and salary, Matloff observed that Microsoft has been exaggerating how much it pays foreign workers. Citing past claims by Bill Gates and Bill Kamela of the Microsoft Policy Council that Microsoft pays foreign workers "$100,000 a year to start," Matloff said the data show that only 21 percent of the workers Microsoft sponsored for green cards during the 2006-2011 period had salaries of at least $100,000, and only 18 percent of Microsoft's sponsored workers with software engineering titles were above the $100,000 salary mark.

"If salary level is indicative of the best and the brightest, as Gates and Kamela suggest, only a minority of Microsoft's foreign hires would qualify," the Matloff authored. "By contrast, 34 percent of Microsoft's green card sponsorees with financial analyst titles made over $100,000, as did 71 percent of its lawyers in the PERM data," he wrote. "It would seem that, counter to its rhetoric, engineers are not top priority for Microsoft... ."

Hira's comments specifically targeted companies reflected in recent findings from ComputerWorld. In February, the magazine revealed that the top 10 users of H-1B visas in 2012 were all offshore-outsourcing firms, specializing in shipping high-tech American jobs overseas. Together, these firms hired nearly half of all H-1B workers, and less than 3 percent of them applied to become permanent residents, according to USCIS data analyzed.

Refocusing the H-1B System on Innovators

Previously, the EPI reported major loopholes in the H-1B program that enable corporate abuse of work visas and make it too easy for companies to bring in cheap foreign workers who displace American workers. For instance, in 2010, the EPI called for an overhaul of the program that should address four fundamental flaws in its design, recommending that the U.S. institute a "labor market test" for the program, which would require companies to demonstrate a shortage of American workers before guest workers are sponsored.

The think tank concedes that the program can fill important roles, welcoming "the immigration of 'the world's best brains,'" but it questions the assertions that the H-1B visa holders each year are typically of that caliber.

As such, this latest study suggests tweaking the system, specifically advising that skilled foreign-worker programs be designed to facilitate the immigration of those who are exceptional in STEM fields be reversed.

"The lack of evidence that the foreign students and workers we are recruiting offer superior talent reinforces the need to assure that programs like H-1B visa are used only to attract the best and the brightest or to remedy genuine labor shortages - not to serve as a source of cheap, compliant labor," Matloff wrote.

The EPI study comes at a time when Congress is considering a bipartisan bill that would increase the number of H-1B work visas in the U.S. from 85,000 to 115,000 annually and allow the cap to go as high as 300,000 based on demand.