Technology firms, big banks, and other corporations have all been big users of H-1B visas, which enabled them to hire talent from overseas. When President Trump temporarily banned H-1B visas in mid-2020, it sparked protests from companies that it would lead to pay inflation for U.S. workers.
However, the ban has plenty of supporters. Key among them is Hal Salzman, a professor of planning and public policy at Rutgers University.
There’s little reason why companies should complain about the lack of H-1B visa talent, Salzman recently told Dice’s sister site eFinancialCareers: “Annual hiring demand for top talent positions is probably, say, 5,000 new hires a year. Make it 10,000 if you like.” He points out that the United States produces 1.9 million BA and BS graduates a year, plus hundreds of thousands of Master’s degree graduates, plus PhDs: “It seems implausible they can’t find that number among the 1.9 million.”
In a paper published last year*, Salzman pointed out that only a third of all U.S. STEM degree holders are actually employed in STEM jobs, suggesting the majority are under-employed and that the supply of U.S. STEM graduates more than meets the country’s demand. The same paper pointed out that the supply of U.S. STEM students is highly elastic and increasing: “The U.S. education system has produced ample supplies of students to respond to STEM labor demand.”
Why, then, do companies such as banks and tech firms like to hire developers, quants and data specialists from overseas? Salzman thinks it’s all about labor arbitrage and that the U.S. government shouldn’t be supporting such efforts: “H-1B is the government reaching its hand into the pockets of tech workers (those lucky enough to get a job) and handing out the money it grabs to the tech companies’ executives and shareholders.” That echos what longtime critics of the system have said.
If banks and technology firms really need specialist talent from overseas following the H-1B ban, Salzman added, they can still hire it using visas such as the O-1 for outstanding talent, which has fewer constraints than the H-1B. They could also recruit some of PhD students who leave U.S. universities each year, only half of whom Salzman says are in “career jobs.”
“Are we to believe the talent these companies are looking for is so extraordinarily rare and greater than doctoral scientists? Or engineers?” Salzman said. “I’d like a cheaper iPhone but, so far, the government hasn’t created a program to lower the cost, say by using some of Apple’s astronomical profit (on which they pay close to zero taxes via the double Dutch).”
He added: “Guest worker programs are a travesty for all concerned: guest workers are in a modern indentured servitude and many are exploited and, as the ban demonstrates, in a very vulnerable position. The guest worker programs have detrimental impact on the labor market, lowering or at least flattening wages, lowering career tenure, and distorting the labor market for all workers.”
*STEM Performance and Supply: Assessing the Evidence for Education Policy
A modified version of this article originally appeared in eFinancialCareers.