Latest EB-5 News

<< Back To Previous Page

July 31 2012

Skills Deficit

The following appeared in the June 25, 2007 edition of The Wall Street Journal:


So Congress doesn’t want to make the mistake of passing immigration reform that actually encourages people to enter the country illegally. But does that mean we have to live without the engineers, scientists and other highly educated and professional workers needed to keep our lead in high technology?

Judging by the debate in the Senate, the answer is yes.

That’s too bad. One reason this country leads the world in technology is that our companies and research organizations are able to bring in foreign workers using H-1B visas, a visa category set aside for professionals or the highly educated. Engineers, for example, in Silicon Valley, use these visas to work in this country while they navigate a maze of immigration laws to get a green card — a process that can often take years. And technology companies need foreign workers because we’re simply not graduating enough of them to fill the jobs being created.

In January, Dean AnnaLee Saxenian of U.C. Berkeley’s Department of Information co-authored a study of California start-up companies. She reported that, nationwide, 25% were founded by immigrant entrepreneurs. She estimated 40% of start-ups in California and more than 50% in Silicon Valley have at least one immigrant cofounder. These firms produced sales of $52 billion and created 450,000 jobs in direct employment alone. Although Ms. Saxenian did not pull out this detail, it’s true that many of those entrepreneurs at some time used an H-1B visas to legally work in this country.

And we can be glad they did. The impact of start-up technology companies is felt throughout the country. In addition to creating products from lifesaving medical devices to entertainment, start-ups hire real estate agents to lease offices, lawyers to write contracts, accountants to file tax returns, janitors to clean, and large numbers of employees. Employees and contractors in turn buy homes, invest in stocks, pay college tuition and, yes, even purchase this newspaper. So do workers employed by the company’s vendors and suppliers. It would take an economist (and a computer running software at least partly developed by an H-1B visa holder) to calculate the full economic benefit.

Until 1990, there were no limits on the number of H-1B visas. Once as high as 195,000, Congress now allows just 65,000 annually plus 20,000 for U.S. advanced degree graduates. College professors and professionals sponsored by universities and certain research institutions are exempt from visas requirements. Because demand for the visas exceeds supply, the application process has turned into a grab fest. In April, on the first day to file H-1B visas for employees to start in October, over 123,000 applications were received. The government had to hold a lottery. Graduate visa numbers were gone in a month.

Steve Ballmer, Microsoft’s CEO, and other technology executives pled with Congress for more H-1B visas. Mr. Ballmer told the Senate that Microsoft alone has 3,000 unfilled technology jobs.

Instead of more visas, Sen. Bernie Sanders, a Vermont socialist, convinced his fellow senators to approve new barriers for hiring H-1B workers. His proposal would limit the number of H-1B visas to 115,000, the same level that were handed out in 1999, which it was already insufficient. After one year, Homeland Security would be able to approve 65,000 more visas, but it would be at the discretion of DHS whether to do so. The Senate also slapped a $5,000 “training and scholarship fee,” aka, tax, on each visa. That’s on top of other government fees of about $1,000 and, for rush orders, a $1,000 processing fee.

Other proposed changes would eliminate the ability to combine education and experience to meet H-1B standards. So a CEO like Bill Gates (there are others) who did not graduate from college would no longer qualify for an H-1B visa. Ridiculous? Study the history and you’ll see that back in 1988 the INS lost a federal court case on this very issue that was brought by a CEO of a California start-up with 100 employees.

Go back a bit further to the nation’s first technological superhighway, the transcontinental railroad, and you’ll see we’ve cut off necessary workers before. The railroads were built, to a large extent, by Chinese laborers. After the Union Pacific and Central Pacific railroads connected their tracks in 1869 what did we do? We passed the first of many Chinese Exclusion Acts.

Today, we’re repeating the same mistake, this time with workers essential to maintaining our information superhighway. This infrastructure is up and running and what are we talking about doing? Limiting our access to those who help us grow our technology based economy. We need these workers to create new solar technology, develop new medicines and otherwise enrich our lives.

Th H-1B visas has been studied by the Immigration Service and independent groups and little abuse has been found. Levying huge taxes to discourage applicants and barring needed workers would turn the clock back to a time when cutting-edge technology was the steam engine.