It is time to phase out H-1B visas and introduce a “points-based” green card system

OPINION: The H-1B program is widely abused, but blocking foreign workers from coming to work in US is not the solution.

By Vinson X. Palathingal

President Donald Trump signed his newest executive order, “Buy American, Hire American,” on April 18^th in Kenosha, WI. One of the elements of the order addresses the much talked about H-1B visa program and its alleged abuse over the years.

As someone with years of experience with the H-1 visa program and the IT industry, I would like to share my assessment of the situation and off a few thoughts on how to proactively eliminate the causes of corruption in the H-1 program, while ensuring availability of necessary resources at reasonable cost, the life blood of the US IT industry.

A rundown on the current system: The H-1B program allows employers to hire foreign workers under a statutorily defined “specialty occupation” for 3 years, with a possibility of renewal. An employee may only apply through an employer for this visa – no individual can sponsor oneself or others for such a visa. H-1B applicants must have a minimum of bachelor’s degree or higher. As per the current rules, 85,000 applicants are accepted every year, 20,000 of which are reserved for master’s students. The selection process is based on a “lottery,” which has been designed to keep the system fair and free of any biases. Historically, H-1B visas have been dominated by STEM degree holders, who serve in entry-level jobs, mostly in the IT sector.

Anyone in the IT industry can vouch for the fact that there are NOT enough trained people available at reasonable costs to sustain the ever-growing need for such professionals in the booming US tech world. That is exactly why there is high demand for the limited H-1 visas available. The accelerated flight of IT jobs out of the country generally known as “outsourcing,” which that started in the mid to late ’90s can also be attributed to such shortage. With tech companies growing at a faster rate than ever and an increasing number of businesses diversifying their infrastructure and online presence, the demand for such engineers and computing experts is increasing rapidly. Those who deny this fact for whatever reason are not helping in making the situation any better. If such a resource crunch is not addressed in a timely and adequate fashion, more IT jobs will move to places where such talent is available and the US economy will be the ultimate loser.

Most of the antagonists of foreign worker programs cite diminishing wages in the US as a prime reason for their opposition to such programs. The reality is far from it. The average starting salary for a computer science graduate when compared to any other degrees is at least double, if not three times.

IT professionals in the US are already making a lot more than their counterparts in other disciplines. This is adversely affecting the growth of the US IT sector, especially when the tech sectors in countries, such as India, Sri Lanka, Bangladesh, Pakistan and Philippines — where a sizable trained English-speaking population work force is available — are rapidly expanding.

Further shortage of such resources in the US will help increase the salaries further, thereby increasing the divide between the rich and the poor in this country. However, that will also choke the US IT industry, especially the startups and small businesses who can’t afford to keep employees at ever-increasing salaries. It is a really bad thing for the future of American innovation, entrepreneurship and economic expansion.

On the other hand, we must also admit that the H-1B program is highly abused by large companies, who hoards visas and exploit H-1B workers. The lottery system is not at all helping to bring the best talent as hundreds of thousands of highly skilled workers are losing out in the lottery when not so qualified ones gets in with sheer luck.

The program, as designed, is supposed to be serving as an important tool to attract top talent to the US. I personally think it should also serve the purpose of augmenting the IT workforce at the entry and mid-levels as well. However, in the current format, the program is not able to serve any of these purposes efficiently due to a built-in opportunity for abuse and corruption. It has also resulted in an unnecessary waste of government and corporate resources by creating an unproductive bureaucracy.

Corporations engaging in artificial exaggeration of resumes, carefully wording visa applications to best meet the legal criteria, and contractually obligating such employees to stay with the company even when it is illegal are some other major concerns. Some companies also use a vast amount of resources to flood the applications and tilt the odds in their favor, at the expense of small businesses or other corporations that play by the rules.

The current system allows the employers to define the shortage based on the qualifications of the candidates they have in custody without any regard to what the real needs are. This leaves a lot of room for manipulation and corruption.

The federal government is in charge of the immigration system in this country, and if more specialty occupation immigrants are needed, the federal government should be able to control the inflow of immigrants based on the needs evidenced by real time data from the market. Ideally, employers should have no business in that intake process other than giving government feedback on the trends in needs.

RELATED: Decreasing H-1B quota is not in the American interest, nor is it practical (November 15, 2016)

Also, the US being the market leader in the IT industry, the most experienced in each IT segment are already in this country. What we need to do is to make sure the best and brightest young talents are fed to the employment market so that they can gain the necessary experience by working here. By demanding senior level experience to get H-1 visas approved, employers are encouraged to beef up the resumes of the candidates they find.

That there is an undeniable shortage of tech labor in the US, with the H-1B program failing in front of our eyes, is not lost on the Capitol Hill. Many politicians have also taken up the cause, though they have not been able to devise workable solutions so far, some falling victim to Washington politics and bureaucracy and the others to special interest lobbying.

The Trump administration seems to be taking this issue seriously, just as it has done with some other long standing issues, and is trying to make a positive impact. In that light, the recent executive order from the president should be considered an opportunity for real reform and should be applauded by all.

One of the major fallacies in Washington is that a complex problem requires a complex solution. Having spent most of my life as a small-business owner, that too in the IT sector, and with an in-depth understanding and experience with the H-1 program, I beg to differ. Over the years, I have made some observations and come to conclude that this issue can be resolved only by a realistic, not rhetorical, assessment of the situation and by developing pragmatic approaches for the short term and long term separately.

1) Introduce a new “points based” green card system

A new “points based,” meritocratic system for granting green cards directly to two categories of people: the best and the brightest international students in STEM disciplines; and the best and brightest and exceptionally experienced STEM foreign workers.

In 2016, the Los Angeles Times reported that there are more than 1 million foreign students in the United States. These students often enjoy high standardized test scores and excellent academic records prior to coming to the US, in addition to being greatly assimilated into the American culture and adapted to life here during their US education. They are ideal candidates to become outstanding future citizens of this country, where we have spent nothing for their education until they come to US for higher studies. A significant section of these students are in STEM disciplines and are ideal candidates to be fed at the bottom of the employment pyramid in the IT industry.

The introduction of a “points based” meritocratic system, similar to the systems implemented in countries like Canada and Australia, which facilitate the granting of green cards directly to the best of the lot from the international STEM graduates from US universities is the first thing we need to start working on. The “Points Based” system should be designed essentially as combination of Standardized Test Scores (SAT, ACT, GRE/GMAT), GPA, university ranking, and teacher recommendations and testimonials. The admissions experts from major US universities should be drafted to help the government in designing and developing this system.

The number of such green cards issued should have an annual maximum (say 50,000) but not a mandatory minimum so that federal government decides based on the need how many green cards are issued every year. Depending on the quality of the applications and the points they get, the US can choose to approve applicants with more flexibility. Each yearly batch will be considered separately, with points dictating the verdict and not approval targets.

Such a system can also be enforced for non-student immigrant workers applying from foreign countries. Many bright minds from all over the world wish to pursue employment in the United States. They, too, often find it a struggle to maneuver through our bureaucratic mess and employer manipulations in the current H-1 and green card application processes. The new system should make it easier for such exemplary people to enter the US for work.

2) Make H-1B visas purely temporary without adjustment of status and path to citizenship:

Once we switch to a “point based” system, as described above, the H-1B program can slowly be phased out. It can continue in the near-term to bring in foreign workers on a purely temporary basis, with a single intent to come and work in the US for a maximum of 6 years, without a path to automatic adjustment of status, green card or citizenship. However, those on H-1 should be afforded the opportunity to participate in the direct green card programs listed above.

3) A revised approach at the domestic and educational level:

This will perhaps be the biggest challenge we will face. There needs to be a serious introspection into our education system. A massive cultural shift is warranted that encourages STEM pathways for students to satisfy the aforementioned labor shortage. Most of these new types of jobs do not require degrees, and, with specialized practical training, bright high school graduates with good STEM courses can do this as efficient as college grads. As the president mentioned in his press briefing announcing the executive order, a return of vocational schools can satisfy much of the demand in related industries. Such a solution will take time, but is necessary for a permanent repair, rather than a short-term “band-aid.”

(The writer, an IT industry entrepreneur, is the Executive Director of the Indo-American Center in Washington, DC.)

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