Letting in More Skilled Foreign Workers Could Discourage U.S. Talent, Report Argues

The United States is already training more technical talent than the job market can absorb, says a new report, and immigration policies that encourage an inflow of high-skilled foreign workers are likely only to make matters worse. The analysis, by a trio of academics, comes as the U.S. Senate begins to debate a controversial proposal with provisions that would ease the ability of foreign-born engineers and scientists to work and live in the United States.

"The argument here isn't that foreign workers aren't good or productive," says report co-author B. Lindsay Lowell, a demographer at Georgetown University in Washington, D.C. "The question is at what amount. Is more better?"

Just how far the United States should go in attracting foreign workers with STEM (science, technology, engineering, and mathematics) training has been the subject of long and fractious debate. Some analysts and high-tech companies see a dearth of technically trained workers and say that the situation is hobbling economic growth and innovation. But other observers say that there is little evidence of a serious shortage of homegrown STEM talent, and that policies that encourage companies to hire temporary foreign "guest workers" have helped suppress wages in some fields. Lower salaries, they argue, further reduce the incentive for U.S. students to enter STEM disciplines.

The new report from the Economic Policy Institute (EPI), a Washington, D.C., think tank with close ties to labor unions, comes as the debate enters a particularly fierce new phase. On 17 April, a bipartisan group of eight U.S. senators unveiled a sweeping proposal to overhaul the nation's immigration policies. Its proposals to create a path to citizenship for an estimated 11 million undocumented immigrants already living in the United States and to boost border security have gotten the most attention. But firefights are also breaking out over provisions that would boost the number of temporary workers that high-tech companies can hire and make it easier for foreign students who earn advanced STEM degrees from U.S. universities to permanently remain in the country.

In particular, the proposal calls for increasing the number of temporary H1-B visas for skilled workers—which last up to 6 years —from 65,000 to 110,000; the cap could ultimately rise to 180,000 depending on economic conditions. The legislation also boosts from 20,000 to 25,000 the number of additional H1-Bs available to foreign students who earn advanced degrees in STEM fields from U.S. schools colleges and universities (but not including in the life sciences, which are considered to have an oversupply of workers).

The bill would also increase the proportion of permanent "employment" visas reserved for more educated applicants. They could receive 40% of the 140,000 visas issued annually, up from 28.6% now. Foreign-born students who earn a master's degree or higher in a STEM field from a U.S. institution in the preceding 5 years would automatically qualify—an approach popularly known as "stapling a green card to their diploma."

The Senate bill would also create 120,000 new "merit-based" visas to be awarded via a scoring system. One-half would be reserved for skilled workers, who would earn points for holding advanced degrees or starting businesses. The number of merit visas could grow to 250,000 over time. An additional 10,000 green cards would go to entrepreneurs who raise $500,000 in capital or generate $750,000 in U.S. sales and employ at least five people.

Taken together, these provisions would attract more immigrants with STEM skills, the bill's backers argue. Now, about 75% of the some 1 million people a year who win the legal right to permanently live and work in the United States do so as a result of family ties. Fewer than 15% receive green cards based on their education or skills. The bill aims to move that ratio to about 50-50 within several decades.

Although today's report doesn't address that long-term goal, it does question the need for more foreign STEM talent, especially temporary H1-B workers. U.S. colleges and universities already produce more STEM graduates than can find jobs in technical fields, it argues. And a steady flow of H1-B workers appears to correlate with stagnating wages in some STEM fields, especially in information technology. Those flat salaries, in turn, appear to discourage domestic students from entering fields such as computer science, the authors conclude.

Claims that the United States needs a larger influx of foreign STEM workers have become "a self-fulfilling prophecy," says EPI Vice President Ross Eisenbrey. "When wages are growing, [we] saw a healthy increase in U.S. [STEM] students going into these fields. When wages are falling, they didn't. … [If you] discourage good U.S. students from going into these programs until finally you've killed the U.S. supply, that's not much different from moving these jobs offshore."

That wage spiral could worsen in some fields if Congress makes it easier for foreign students who earn advanced STEM degrees to remain in the United States, the scholars suggest. It also could create incentives for schools to recruit more foreign students as a way to pay the bills, says co-author Hal Salzman, a sociologist at Rutgers University in New Brunswick, New Jersey. He worries that the provision could become a way for universities "to make money … and just flood the [job] market" with foreign-born STEM applicants.

Such views—and the data underlying them—are sure to be contested by university officials, high-tech industry executives, and other players in the immigration debate. The Senate held hearings earlier this week on the so-called Gang of Eight's proposal, and supporters are hoping for a final vote this summer. Members of the U.S. House of Representatives, meanwhile, are framing their own immigration proposals that focus on specific issues like border security or high-skills workers. Whether any of the plans will ultimately become law is far from clear.