Katy Preston

The H-1B nonimmigrant visa quota is one of the most hotly debated programs in the United States. Its supporters say it’s necessary for America to remain competitive in technology and engineering; its opponents say it hurts the interests of American and foreign-born workers alike.

In the interest of our clients, we at Zhang & Associates support raising the H-1B quota. However, we still think it’s important to examine both sides of this controversial issue.

Origins of the H-1B Visa

The Immigration Act of 1990 established the H-1B visa to allow American firms to bring skilled workers to the United States on a temporary basis. H-1B workers had to have at least a bachelor’s degree or equivalent professional experience, and they had to be paid the prevailing wage in their field. They could come to the United States for an initial three years, with the option to extend their stay for another three.

The 1990 act also established an annual cap, or quota, for H-1B visas: only 65,000 could be granted per year. However, certain organizations, such as nonprofit research organizations and universities, were exempt from this quota.

For the first few years of the H-1B visa program, the quota was not met. It was not until 1997 that the quota became a central issue in the immigration debate.

History of the H-1B Quota

In September 1997, the H-1B quota of 65,000 was reached for the first time. This increase in H-1B workers was largely due to the flourishing technology industry in the United States, including the beginning of the so-called dot-com boom.

When technology firms found their supply of foreign skilled workers suddenly limited, they began to argue for an increase in the quota, claiming an unmet demand for high-tech workers. Other reports and predictions of shortages in the industry, partly due to the Y2K scare, bolstered their argument. A year later, in October 1998, the firms got their wish: the quota was increased to 115,000 for the next two fiscal years.

The original plan was for the quota to drop back to 65,000 by 2002; however, when the new quota of 115,000 was filled very fast, this planned decrease was immediately called into question. In 2000, Congress voted to increase the quota again—this time to 195,000—after intense lobbying from technology firms. And yet again, this new, even higher quota was reached quickly, and continued to be reached quickly until 2003.

In late 2003, the quota reverted to its original number of 65,000 for the 2004 fiscal year. Technology firms complained about worker shortages, but no additional increases were added for the time being.

In 2004, the additional “advanced-degree cap” of 20,000 was added for H-1B applicants who had received graduate degrees from U.S. institutions. This measure effectively raised the H-1B cap to 85,000, but demand for H-1B visas still far exceeded the supply.

The quota has remained at 65,000 (plus the advanced-degree cap) since 2004. Each year, the quota is filled with alarming speed. This past April, USCIS received over 150,000 H-1B petitions on its first day of accepting them. USCIS used a lottery system to randomly select 65,000 petitions for approval.

Current Controversy

The question of whether to raise the H-1B quota has been a point of vicious controversy for the past few years. While technology firms claim to be desperate for more visas to fill labor shortages, American workers and advocacy groups say the program is harmful—some of them even calling for the abolishment of the H-1B program altogether.

In favor of raising the quota: Generally, the technology industry and other American businesses support raising the H-1B quota. Their main argument is that the current H-1B quota is inadequate to meet labor shortages.

In March 2007, Bill Gates spoke to Congress about raising the H-1B cap. He suggested that the quota be removed entirely, so the United States could welcome an infinite number of skilled foreign workers. Gates emphasized that the jobs in question would go vacant otherwise, which would hurt American business.

Proponents of raising the quota also argue that bringing foreign workers into the country is better than the immediate alternative: outsourcing. They claim that maintaining the current H-1B quota will lead to more outsourcing for industries that are able to do so, and even more serious problems for industries that aren’t, like hospitals and school districts.

Finally, those in favor of raising the quota argue that the H-1B program is necessary to attract the “best and brightest” from around the world to work in the United States. They cite the history of foreign workers coming to America and making major innovations, and emphasize that this must continue for the United States to remain a world leader in technology and other competitive industries. Furthermore, some argue, the lack of available H-1B visas is causing a “reverse brain drain,” where educated workers are leaving the United States to find jobs overseas.

Against raising the quota: Organizations of American engineering and technology workers, such as the Programmers Guild, and CNN journalist Lou Dobbs have stated their opposition to raising the H-1B quota. In general, they feel that H-1B visas harm American workers by providing a source of cheap labor for American businesses—which isn’t the H-1B visa’s true purpose.

For example, opponents of raising the H-1B quota criticize the lack of a labor market test for employers filing H-1B petitions. They object to the fact that only very heavy users of H-1B visas have to look for a U.S. worker before applying for an H-1B. In fact, people in this camp claim that American businesses are using H-1B visas to displace American workers. They think raising the quota would make this problem even worse.

Lou Dobbs in particular has also noted that the majority of H-1B visas are not actually going to American companies, but to Indian outsourcing companies. Therefore, he says, arguments that H-1B visas help prevent outsourcing are not valid.

Opponents of raising the quota also question the claim of businesses that the H-1B program brings the “best and brightest” to the United States. They point out that most people working on H-1B visas are employed in entry-level positions. Some people and organizations who feel this way would like to shift more emphasis to permanent residency programs like EB-1 and NIW, which require a higher level of experience and ability. Others propose changing the current lottery system used to approve H-1B petitions into a merit-based system, where visas would be granted to applicants with the most education or highest salaries.

By and large, the most common complaint of those of who oppose raising the H-1B quota is that H-1B workers are underpaid—and are thus undermining demand for American workers, especially in fields like technology and engineering. Lou Dobbs, for example, claims that an average H-1B worker makes about $12,000 less per year than an American worker in the same position and geographical location.

Those against raising the quota point out that in addition to putting American workers out of their jobs, the current system hurts H-1B workers by paying them unreasonably low wages. Some opponents of raising the quota say they would change their position if H-1B workers were paid more fairly—for example, if the Labor Condition Application process did more to enforce the prevailing wage requirement of H-1B petitions.

Recent Developments

Last month, the U.S. Senate voted to approve a fee increase for H-1B petitions. Under this measure, employers would have to pay an extra $3,500 to sponsor an H-1B petition. The extra money would create scholarships for American students studying math, engineering, and science.

The technology and engineering industries have already stated their objections to the proposed fee increase. They complain that the United States is already behind other developed countries in its ability to import foreign talent. For example, the European Union recently created a new plan that makes it easier for well-educated foreign professionals to work in EU countries. Organizations such as the Software & Information Industry Association believe that the proposed fee increase would only exacerbate this problem.

The measure has yet to be approved by the House of Representatives, and the threat of a presidential veto looms even then. Zhang & Associates will keep its clients updated on all future H-1B news.

Zhang & Associates’ Position and Lobbying Efforts

In the interest of our clients, we at Zhang & Associates support raising the H-1B quota.

When our representatives spoke with lawmakers this September, the H-1B quota was one of their main concerns. For example, Matthew Graham and Attorney Ben Wisniewski spoke with Representative Louie Gohmert (R-TX) about the importance of foreign-born skilled workers to America’s economic competitiveness and technological innovation.

Overall, our lobbying efforts have received a positive response; however, nothing is certain, and we will continue to lobby for an increase in the H-1B quota on behalf of our clients.

More Information

Our website:
Immigration Library: H-1B
Our recent lobbying efforts

Other websites:
The Center for Immigration Studies
The American Immigration Lawyers Association
The Programmers’ Guild

Videos:
Lou Dobbs on H-1B visas
Lou Dobbs on Bill Gates’ March 2007 speech to Congress
Senator Bernie Sanders (I-VT) on H-1B visas
An immigration lawyer and an economist debate the H-1B quota