H1B visa reform could encourage companies to hire more American workers

[link to thehill.com]

After languishing for nearly a year in a congressional committee with two other H1B visa reform bills, the House of Representatives Judiciary Committee voted to send the “Protect and Grow American Jobs Act” to the full House chamber.

This bill introduced by Rep. Darrell Issa (R-Calif.) is similar to the other two bills in that it seeks to ensure American companies take the long view by training and hiring American workers, rather than chasing the quick fix — specifically importing workers from South Asia and damaging our long-term economic prospects in the process.


Issa’s bill addresses H1B visa abuse raising the minimum salary of an H1B visa holder to $90,000 per year and by prohibiting those American companies, whose workforces are at least 20 percent comprised of H1B visas holders, from replacing American workers with foreign worker.


These measures represent a good start, but while the committee deserves applause for moving the bill forward, we remain in a race against time. This is especially true in the tech industry, where the need for qualified workers remains great and vast pools of potential workers remain shut out of the game.

We’re seeing jobs go to H1B visa holders every day. These are jobs that with some formal training could be performed by veterans, displaced blue-collar workers, older workers cut off from their careers, and women returning to the workforce after taking time to raise children. In fact, earlier this year Goldman Sachs estimated that foreign nationals with H1B visas hold nearly one million jobs in the U.S., including at least 12 percent of all tech industry jobs.

At one time, the H1B program served a worthy purpose, providing growing companies the ability to hire foreign workers who possess a specific technical skill the company couldn’t find in its pool of American applicants.

That‘s capitalism; it’s how the global market works at its best. What we’re seeing now, though, is widespread exploitation of the H1B program as an across-the-board cost cutting strategy.

The practice of importing, en masse, foreign IT workers led to the 2014 layoff of 18,000 Microsoft employees and Hewlett Packard’s jettisoning of nearly 85,000 workers over 2015 and 2016. Yet, importing IT workers doesn’t save much money in the short run, and in the long run, it’s a losing strategy.

For instance, only a small percentage of all H1B visa holders in the tech industry can get green cards each fiscal year and stay permanently, resulting in a lack of continuity that damages corporate culture, morale, and quality.

How can a short-term worker on an H1B visa, most likely working for a foreign-based staffing agency, represent a brand with the same level of pride and care as a company employee with local roots?

Even when putting these considerations aside, there is the productivity factor. It shouldn’t come as a surprise that American workers — who from a young age, have learned the importance of creative problem-solving, teamwork and initiative — create more value.

In fact, American workers produce up to twice as much output as their foreign counterparts. The idea that foreign IT workers are cheaper is a fallacy. At a time when we’re seeing a sea-change in the nature of IT work, from rote repetitive task-oriented assignments to automated programming and data management, we’re also seeing a profound need for workers who are flexible and embrace challenge.

This need will only grow as technologies such as blockchain, Internet of Things, artificial learning and 3D printing become ubiquitous and central to a company’s ability to compete.

If American industry is going to remain the epicenter of innovation by taking full advantage of next-generation enterprise technology, we’ll need IT workers at all levels who can thrive in a perpetually shifting business environment. The bi-partisan nature of the H1B bills, including bills similar to Rep Issa’s introduced by Rep Zoe Lofgren (D-Calif.) and by Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill,) is extremely telling.

There is a mainstream desire not to end the H1B program, but rather restore it to its original intent. The common themes in these bills are also common sense. They increase the minimum salary for H1B visa holders, enforce the requirement that these workers must possess a skill that employers can’t readily source from the American worker pool, limit the number of H1B visas that go to companies with more than 50 employees, and prohibiting certain companies from replacing American workers.

Of her bill, which increases the minimum H1B worker salary to $130,000, allocates 20 percent of the visas to startups and eliminates per country caps for workers with unique skillsets, Rep. Zoe Lofgren (D-Calif.) said, “It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have the access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs.”

Will H1B visa reform prevent companies from hiring the talent they need? No. However, it will compel them to think carefully about which needs they can satisfy exclusively by bringing in foreign specialists. It will also mean that they will have to invest in the types of recruiting programs and technical training models that unleash American workers to do what they do best: Produce.

Harley Lippman is CEO of one of Genesis 10, one of the nation’s largest domestic IT staffing firms.