Do H-1B Workers Displace American Workers? It’s Not a Zero-Sum Game

May 18, 2021 | Human Resources Services, Nonimmigrant Visas

With the reduction in available U.S. jobs due to the pandemic and a slowdown in hiring, ways to create “good-paying jobs that can’t be outsourced” are a high priority, as President Joe Biden told Congress in April. It is often said that H-1B workers displace American workers and that restrictions on foreign workers create American jobs. The opposite is actually true.  H-1B workers create jobs for U.S. workers and benefit the American economy, and restricting H-1B visas leads to companies offshoring jobs from the United States to other countries.

It may seem a common-sense assumption that restricting and discouraging H-1B workers would necessarily lead to companies hiring American workers. But that assumption would be wrong. Consider these facts:

  • Research shows that in many cases, multinational companies simply moved workers around or hired them at foreign affiliates overseas if they couldn’t obtain a sufficient number of H-1B workers here, rather than hiring U.S. workers instead to fill all of those positions. Foreign affiliate employment as a result of H-1B restrictions has increased in Canada, India, and China in particular, as evidenced by decisions like Microsoft’s to open an R&D affiliate in Vancouver, Canada.
  • According to the National Foundation for American Policy (NFAP), the presence of H-1B visa holders is “associated with lower unemployment rates and faster earnings growth among college graduates.” Further, NFAP reports that “being in a field with more H-1B visa holders makes it more likely that U.S.-born young college graduates work in a job closely related to their college major,” and that in general, “[a]n increase in the share of workers with an H-1B visa within an occupation, on average, reduces the unemployment rate in that occupation” and “leads to faster earnings growth for U.S. workers.”
  • Sufficient numbers of U.S. workers with comparable high-tech skills are often not available.
  • Companies who can’t get the workers they need in the United States may recruit and advertise outside of the country. With the increase in remote work during the pandemic, it seems likely that this trend may only increase.
  • Demand for H-1B workers has only grown despite the downward pressure.
  • Not hiring H-1B workers doesn’t always mean providing a job for a U.S. worker; instead, it can mean losing the U.S.-obtained education and skills of foreign workers in science, technology, engineering, and mathematics (STEM) fields who are already working for those companies on student work permits but are unable to get H-1B visas.  For example, Canada is offering “Express Entry” for skilled workers, and some have found it an attractive alternative to battling lengthy and uncertain U.S. application processes along with anti-immigrant and anti-H-1B efforts, especially in recent years.
  • According to reports, it is typical for large companies to offer employees who are not chosen in the H-1B lottery a transfer to an overseas office and the possibility of applying again for an H-1B visa in a subsequent year.
  • Another alternative option companies are suggesting to students working for them is to re-enroll in a new STEM field at university with a training option, thus maintaining student visa status and the ability to work for the company.

The data show that the inability of companies to hire a sufficient number of high-skilled workers in the United States directly results in offshoring tech jobs abroad and a reduction in R&D investment in the United States, rather than creating more jobs for U.S. workers. Making the United States less attractive to foreign workers ultimately reduces the ability of companies in the United States to remain competitive in an increasingly global economy.

The bottom line: In many cases, rather than supporting an increase in higher-paying jobs and incomes for U.S. workers, H-1B restrictions have led to unintended consequences for the U.S. economy, U.S. workers, and companies wishing to continue to hire and do business inside the United States. Competition between U.S. workers and H-1B workers is not a zero-sum game.

Contact your WR attorney for advice and help in specific situations.

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