US think tank: H-1B, work visas create jobs for Americans

Cato Institute says Trump ban based on a misreading of economic statistics.

By Arun Kumar

President Donald Trump’s suspension of several work visas, including H-1B largely utilized by Indian professionals, actually targets the very programs that create jobs for Americans, according to a leading US think tank.

Trump suspended several work visas including J-1, L-1, H-1B, and H-2B visas in the name of protecting jobs for Americans, David J. Bier of the Cato Institute’s Center for Global Liberty and Prosperity, noted.

“But the fact is that these programs create jobs for Americans, and eliminating them will undermine job growth, hurting the recovery” from the covid crisis, Bier, an immigration policy analyst at the think tank wrote.

“The most important point is that all immigrant workers create jobs because they participate in the economy not just as workers but also as consumers,” Bier wrote suggesting, “If Trump wants the economy to recover quickly, he should favor an all‐hands‐on‐deck approach, not a government‐micromanaged strategy.”

H-1B workers are disproportionately involved in information technology jobs, he noted that are “essential during a time when people are transitioning to remote employment.”

“The ability to work remotely has reduced the risk of job loss early in the crisis by 32 percent to 53 percent,” he wrote citing research by Adam Ozimek.

Nandini Nair: Who will be affected by the Trump visa ban?

“Other research has shown that more jobs would have been created during the last recession if so many H-1B workers weren’t denied visas,” Bier wrote.

This is so “because these highly productive workers greatly increase a firm’s production and increase demand for workers elsewhere in the economy.”

“If the president wants a V‐shaped recovery, turning down foreign investment, keeping out talented skilled workers, and punishing businesses trying to survive this period is not the way to do it,” Bier wrote.

“To respond to a downturn caused by a pandemic, the goal should be to stop the pandemic, not fundamentally alter the US labor market,” the policy analyst suggested.

Asserting that Trump’s H-1B ban was based on a misreading of economic statistics, Bier and his colleagues questioned the president’s claim that more than 20 million US workers lost their jobs in ‘key’ industries between February and April this year.

Suggesting there was widespread “confusion between industries and occupations,” Bier noted that “nearly all workers in the top H-1B occupations were still employed in May.

RELATED: H-1B updates: What are the implications of Trump’s new executive order? (Posted June 22, 2020)

“It turns out that from January 2020 to May 2020, total employment increased by about 185,000 in the top 20 H-1B occupations, which account for 85 percent of all H-1B requests,” he wrote citing the Current Population Survey.

The number of unemployed increased by basically the same amount 194,000—a difference of 9,000, Bier noted. “This is substantially different from the 20 million cited by the president.”

Moreover, unemployment in H-1B occupations was already falling in May from April, he pointed out.

Since the State Department suspended visa processing at consulates in March, visas in the banned categories were already down 93 percent last month compared to the first quarter of FY 2020 before the order took effect, Bier wrote citing official statistics.

In the five visa categories that the Trump order targets, H-1B visa approvals for high skilled foreign workers were down 99 percent, relative to the first quarter monthly average, Bier noted.

RELATED: Indian American-led tech giants decry new Trump visa curbs (June 23, 2020)

H‐ 4s for their spouses and children were also down 99 percent. L visas for intracompany transfers were down 97 percent, and J visas for exchange program participants were down 98 percent.

Only the H-2B visas for nonagricultural seasonal workers were less affected but were still down 29 percent. Some H‐ 2Bs in food production industries are exempt from the latest ban as well.

Overall, just 5,272 work visas were issued in May, from a high of 91,886 in December.

The president’s proclamation also extends his earlier ban on immigrant visas for prospective legal permanent residents.

Overall, immigrant visa issuances too were down 98 percent in May, relative to the monthly average in the first quarter of FY 2020.

NASSCOM: Curbs on H-1B, other work visas ‘harmful’ to US economy (June 23, 2020)

President Trump’s order will have many negative economic implications if consulates reopen, but with consulates closed, the order will affect almost no one right now, Bier said.

“The ban still matters because it locks in these reductions in work visas, and it establishes a precedent that the administration can extend indefinitely as it has with its other bans on asylum seekers and Muslim majority countries,” he said.

2 Comments

  1. Jake Leone

    I to ask myself, if companies didn’t need computer software workers, programmers, even QA people because say there were unlimited numbers of H-1b workers.

    Would I have had a job, in the Computer Software Development for these last 30 years?

    I really doubt that. Getting my initial, high profile job, with Tech company (a major Japanese tech company with offices in Silicon Valley) was chancy. The recruiter was stunned that they called back to hire me. He said, you know that just doesn’t happen for people WITHOUT A COMPUTER SCIENCE DEGREE at that company.

    But they did. They made me a permanent employee. That first long term job led to my current job of 20 years.

    But lets say, I had to compete with 10 other candidates for that job. All with evidence of a Masters degree. What would have happened. And if that was the case all over Silicon Valley? Well I might be flipping burgers right now.

    Right now I make more than 5x what a burger flipper makes. I make enough to own a home, to take care of my wife and family.

    I didn’t face heavy competition back in the mid 90’s for a job. I write software for my current employer, I haven’t had to rely on government health care. With what I pay in taxes each year, I probably employ 1 or 2 government workers. I buy services that further employ people.

    Look, these Computer Science jobs don’t require Computer Science degrees, except by Excecutive Meme. And by that I mean the same MEME that had everyone coming to work and sitting 3ft away from each other. A policy my current employer is reviewing in this Covid Sequestered World.

    Any job that pays around 100k, is going to create other jobs. 1.83, that’s ridiculously low. What we need are jobs that:
    – Get people off the unemployment line
    – Have the people doing the jobs, making sufficient money, to pay taxes to employ the government workers
    – Have people doing jobs, making sufficient money, to hire contractors or other help, further making more jobs.

    And you can add 1 extra worker (to that 1.83), guaranteed, if instead of hiring a foreign worker, you instead train an American (or just keep one on, instead of replacing them with an H-1b worker, like at Disney) such as was my experience.

    What we don’t need are bunch of cash hoarding CEO’s whining, they can’t find enough “qualified workers”, simply because they need a boost in profit that will justify a big bonus in stock and cash incentives.

    H-1b is a fundamental manipulation of the Free Market. It is not Capitalism. It is what occurs when the Oligarchs turn to the government for handout. And so the government starts picking the winners and losers in the market place.

    Instead of the H-1b, we need a system (like Green Cards) that restore full labor rights to workers. The same rights that makes labor valuable. Valuable enough to justify on the Job Training and investment. Not sardine packing in order to say money, because it is latest Board Room or Golf Course Viral MEME.

    And you can’t tell me that giving H-1b visas to Offshore Outsourcing companies creates 1.83 jobs. That insanity, bought and paid for by the American Oligarchs, has destroyed far more jobs that are created via the occasional good H-1b employee acquisition.

    Part of Trump’s executive order, is to restore a Market Mechanism (instead of an idiotic lottery), to determine which companies are award an H-1b visa. That alone is so much more than what 4 Presidents (over 30 years) ever did, even though it was fully within their power to do so.

    Does the CATO institute even realize that the H-1b is a U.S. Government program that is designed to pick the winners and loser in the Free Market? I don’t think they really understand that anytime the government creates and artificial class of person, they are in fact interfering with Free Market forces, that would solve the problem in a sustainable way.

    Drop support for H-1b and instead concentrate of true Free Market forces. It is clear to me, and it will be to you, if you read the E-mail exchange between Steve Jobs and Eric Schmidt. Employers don’t want a free market in the United States, they want compliant workers that don’t have any rights to bargain for their services on the Free Market. And that is not only Un-American, it is fundamentally Anti-Capitalist.

  2. Ben Prusinski

    Absolute rubbish. CATO institute is a bunch of overpaid doozies, what the hell do they know! They’ve never ever created a job for anyone have they? Enriching themselves on grants, endowments and other fatass perks while trying to stiff everyday working class Americans is their job. Screw all these ivory tower bozos that want to stuff the country with cheap imported poorly skilled visa workers from India. Send them all back.

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