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Dartmouth Study: H-1B Visa Restrictions Hurt U.S. Businesses, Job Growth

Friday, April 8, 2016

According to a new report from the Tuck School of Business at Dartmouth, the United States’ harsh restrictions on the number of skilled immigrants are impeding job growth in the country and driving up the cost for U.S. Businesses to hire the work force they need to be competitive.
According to U.S. News, the findings suggest that “existing H-1B visa regulations are limiting productivity growth in the U.S. and costing American firms a fortune.” United States Customs and Immigrations Service estimates it received nearly a quarter-million H-1B visa applications for fiscal 2016. The limits are currently set at 65,000 visas each year, although recent policy changes allow for additional or extended visas for certain advanced  education and training programs.
At the same time, demand for highly-skilled workers in the United States has steadily increased, particularly in STEMM fields (science, technology, engineering, mathematics and medicines) and in the U.S. tech sector. Fewer U.S. students are completing STEMM programs, while baby boomers in tech jobs are retiring in larger and larger numbers. The federal government estimates that there will be a shortage of up to 1 million job candidates to fill employers’ STEMM demands in the next decade.
This shortage has created a demand among employers for skilled immigrants. However, current quota levels are also failing to keep pace with domestic employers’ demand. This, in turn is bad for U.S. companies – and native born workers. The study notes that 77 percent of companies surveyed said that failing to fill a skilled position in less than 30 days has a negative impact on operations. In addition, 71 percent of respondents acknowledged a willingness to move operations to another country if finding skilled workers in the U.S. continued to be too expensive or difficult. Microsoft has already opened a Canadian facility for this very reason.
Contrary to the fears of many anti-immigration voices, it is not cheaper to hire skilled foreign workers than it is to find domestic employees. In order to work in the U.S., an H-1B visa holder must have an employer-sponsor. The cost of sponsoring a skilled immigrant can cost a firm thousands of dollars. Once here, H-1B visa holders typically earn wages that are on par with their domestic counterparts.
As the Dartmouth paper concludes, opening up the H-1B system will actually create more job opportunities for U.S. workers by allowing companies to expand domestically. On the other hand, failure to pass laws that, at the very least, raise the quotas for skilled immigrant workers will likely result in loss of jobs and a slowing of growth in the U.S. economy.

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