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The Path Less Traveled: Why More H-1B Numbers By Themselves Are Not The Answer

by Gary Endelman

It did not take long for the next H-1B emergency campaign to start. Within hours of the USCIS announcement on July 28, 2006 that all 20,000 cap-exempt H-1B numbers for advanced degree holders from American universities had been exhausted two days earlier, business and the immigration bar launched their most recent appeal for more numbers. The fact that the H-1B bachelor's level quotient for FY 2007 was already a distant and fading memory, a casualty of the hunger that took its toll before Memorial Day, some 12 weeks before the new fiscal year even began, doubtless added to the palpable sense of shock. This is the earliest that the cap has ever been reached. Desperate employers will have little choice but to outsource projects that cannot wait for H visa liberation day on October 1, 2007. Even a blind man can see that this limitation on H-1B visa numbers is out of sync with reality. Yet, precisely because the emergency is fast upon us, should not cloud the fact that it was entirely predictable, nor make us believe, however devoutly we may wish it so, that more H numbers by themselves will solve the problem. Indeed, they will not. What they will do is to defer a solution, thereby aggravating the structural dislocation that continues to plague the H category and render it less useful than it might be for business, beneficiaries and US workers. Only in the context of true and meaningful H reform should more numbers be provided.

Those who call for H numbers and nothing more are fooling themselves and doing both their clients and the nation a grave disservice. Theirs is a manifest failure to use technical expertise in the service of America's larger strategic interests. What are we prepared to give up in return for more H numbers? How do we want the H to change? Only when we answer both threshold questions will the argument for H visa reform become culturally and politically sustainable. The H crisis can remain a symbol of open borders and corporate indifference to its critics, however wrong headed they may be, or it can become an opportunity for pro-immigration advocates to realign themselves with the legitimate interests of America's workers whose support in the end is essential for our cause to survive and be worthy of survival. We cannot have, nor should we enjoy, an enlightened immigration policy outside the context of a just and compassionate society. The opportunity to realize the American dream in full measure is not the exclusive province of those favored by an accident of geography for it is more noble and enduring than that, belonging as it must to the best and the brightest from all lands who make our cause their own. Rather than settling just for more H numbers, now is precisely the moment to transform our present troubles into a unifying vision of an immigration policy that is both generous and grounded in the importance of setting limits.

What we are dealing with is a global battle for talent. More than any other single immigration issue, the H-1B debate highlights the growing and inexorable importance of a skilled entrepreneurial class with superb expertise and a commitment not to company or country, but to their own careers and the technologies on which they are based. They have true international mobility and, like superstar professional athletes, will go to those places where they are paid most handsomely and given a full and rich opportunity to create. We are no longer the only game in town. The debate over the H-1B is, at its core, an argument over whether the United States will continue to embrace this culture, thus reinforcing its competitive dominance in it, or turn away and shrink from the competition and the benefits that await. No decision on H quotas can or should be made separate and apart from an answer to a far more fundamental question: How can we, as a nation, attract and retain that on which our prosperity most directly depends, namely a productive, diverse, stable and highly educated work force irrespective of nationality and do so without sacrificing the dreams and aspirations of our own people whose protection is the first duty and only sure justification for the continuance of that democracy on which all else rests? This is the very heart of the H-1B maze.

What strikes one in the H-1B debate is the extent to it has become entirely predictable, almost mechanistic, speaking only of raising or lowering the cap, often to the virtual exclusion of all else. Are there not other ideas that can infuse this visa with the suppleness the economy demands, while still guarding against potential abuse? The answer for America lies not in more numbers or less, but in a different kind of H-1B visa. The only reason to have the H-1B category, or any other employment-based visa, is to benefit the US economy. Rather than raising or lowering the H-1B cap, change its basic character. Trust the economy that the H-1B should serve. The only cap that makes sense is one that works in concert with, rather than in ignorance of, the market. The best protection for US workers, indeed the only kind that really makes sense, is to impose a market-based cap allowing the economy to decide how many H-1Bs should come and under what terms or conditions. That, more than any artificial limit picked out of thin air, will work. Congress wants H-1Bs to be free to move at the speed of business; DOL and USCIS are concerned and they have reason to worry so long as the H-1B belongs to the employer not the alien. Lawyers fret over a possible loss of clients if the system becomes rational and sub silentio feel protected by the impenetrable forest of hyper-technicality only they know about or can pretend to understand. There is a better way if we have the will to take it. Simplicity and effectiveness are not polar opposites. So long as the system is divorced from reality, it can and never will work. Nor should it.

The inherent difficulty of settling upon an H-1B number that we can all live with suggests that the focus of the debate should be elsewhere. All H-1Bs are not created equal. Quality and character, not numbers, are the real issue. What kind of H-1B workers come is more important than how few or how many. Every H-1B worker comes with a unique talent and distinct potential. Perhaps, more than anything else, the fatal assumption that one H-1B is like the next suggests the absence of imagination, and the failure to honor or recognize the inherent creative potential of work itself, that has sterilized our national conversation on this issue. Whatever the end result, any restriction on H-1B admissions should not be a political but an economic decision arising out of what the economy needs. If we need geophysicists and engineers, for example, more than accountants or commercial analysts, then what the economy needs should be favored over what it can do without. Only when we have a cap that puts the economic interests of America first will such a restriction serve a useful purpose. Old fashioned horse sense tells us to promote H-1B admissions for skill sets in short supply and make life difficult for industries where the domestic work force can clearly pull the load.

This requires a paradigm shift in the way that the US Government thinks about immigration. With the exception of the rarely used investor visa, America traditionally has had a passive approach to business immigration that is driven by the specific needs of individual employers. Whatever comes in over the transom, that is what the USCIS decides. Our economy requires a more activist approach. Just as we deploy tax policy to promote business activity and shape investment decisions, so immigration policy can and must be applied in a targeted and highly disciplined fashion to favor those with certain knowledge or talent while discouraging others. Granting immigration credits to an employer for some H-1B cases, while withholding them in others, or making some H-1B cases subject to a numerical cap while exempting others, are neither new nor particularly shocking ideas. Governments at all levels already do the same things in many other areas of American life, such as environmental remediation, urban renewal, and corporate relocation Immigration is part and parcel of our economic life in all areas of the nation and all sectors of activity. Incentives based on immigration can be just as powerful a magnet in fostering the kind of economic activity that we want to underwrite as government subsidies, tax abatements, or relaxation of building codes. Immigration rightly conceived is a tool that we can use to fashion the kind of society we want to build.

The problem with constant fluctuations in the H-1B cap is not primarily one of numbers, but of uncertainty. In this kind of institutionalized indecision, where the rules of the game change every few years, it is impossible for American employers of H-1B workers to engage in intelligent planning that maximizes the benefit of their presence. Restrictions on where they can work, how often they can travel, what kinds of jobs they can perform- all these inject rigidity and artificiality into the economy that serves no purpose other than to empower those who police such activity. This kind of micromanagement does not create wealth or produce jobs. It does not make US employers more competitive or increase their ability to expand here at home with good jobs going to qualified Americans who need and deserve them. Beyond all this, it is sheer lunacy to look at the H-1B quota in isolation from the real and present need to create a rational, simplified labor market control system. Arguing about the H and nothing else ignores the basic truth that employers do not recruit for 3 or 6 years; they are looking for permanent employees on whom they can rely for the long haul. It makes little or no sense to expand the H-1B quota without enabling these same employers to retain the services of the very H-1B workers they have trained after their authorized stay is up. If we do nothing to reform immigrant quotas with honesty, and untangle PERM, any improvement here is wasted. Frustrated employers will take the logical step and shrink from H-1B sponsorship, unwilling to waste time and money on an alien who will only wind up working for a foreign competitor abroad.

The H-1B has become the test case for all employment-based immigration. If we cannot articulate a rational policy here that serves the nation well, we will likely not be able to do it anywhere else. The ongoing H-1B debate is really about the direction that the American economy will take in the digital age and whether we will surrender the high ground that America now occupies . It is hard to imagine when in history a more unilateral surrender has been contemplated. Both supporters and opponents of the H-1B talk constantly about the "global economy" but act as if we lived solely behind a high wall in Fortress America. We want a seamless movement of trade and ideas across national boundaries but act as if we believe that people must somehow stay behind. Give us your money and your intellectual capital, but be sure to remain where you are! To the extent that Congress thinks about the economic implications of what it is doing, of failing to do, it looks not to the future but to a static present, ignoring the dynamic nature of the American economy as an unsurpassed engine of job creation that is still the envy of the world. Yet, Congress is not alone for all sides, friend and foe alike, seem stuck in the wisdom of past positions loudly taken and not easily changed. How our economy is going to change over the coming decades, and what we can do to align immigration policy with these anticipated needs does not seem particularly high on anyone's agenda. Nativists are content to rail through the mass media against globalization as a surrender of national sovereignty. They are bound to lose this argument. It is only the time, place and nature of their retreat that can be negotiated or postponed. Pro-immigrant advocates will continue to concentrate on incremental advanceds that will, in turn, inevitably create their own unanticipated problems without coming to terms with the central reality that an immigration system not transparently in the national interest will neither prosper nor long endure.

Until now, the ever-increasing fees and hyper-regulation imposed by Congress and the USCIS on H-1B employers have been justified by the simple but stubbornly held, if unstated, conviction that the hiring of foreign workers is contrary to the national interest and should be punished. Beyond that, the USCIS and DOL, not to mention the legacy INS, have always and continue to believe that the infliction of such punishment was the best, perhaps the only way, to shield US workers from such "illicit" activity. Making the H-1B process more painful only showed an unwavering institutional resolve to put Americans first. Critics, even when on target, never really understood, or tried to comprehend, what the USCIS and DOL cared about, nor why they felt so strongly that the H-1B process should be one that must be endured at such a high price. No government should have to apologize for trying to protect its own citizens. The true objection to what the USCIS and DOL have done is that their efforts, however well intentioned, have done precious little to help, but much to hurt, the very objects of their stated concern. Now that the H-1B cap has been reached, where we go from here depends on our own willingness to come to terms with some unpleasant truths, namely that more H numbers by themselves are not the answer. It is not a matter of H-1B numbers or more dollars. Neither a higher H cap, nor unlimited federal funding, can make the current H visa regime work.

OK, what will? Try these proposals on for size. If you do not like them, throw them out and come up with some of your own. Here are some milestones along the march to inform our common journey to a more intelligent H-1B future:

  • Abolish the H-1B cap. Any numerical limit is wholly artificial, based more what is politically possible, not economically necessary. Let the free market determine how many H cases employers need.

  • Eliminate the labor condition application. A symbol of micromanagement at its worst, it is poorly understood and unevenly administered. Its Byzantine complexity benefits only lawyers and bureaucrats, but does precious little to protect American workers and imposes unnatural and wasteful strains upon the wage structure of the vast majority of honest employers who try in vain to comply.

  • Make the H-1B temporary. The H should be valid for 3 years with no extension possible. Six years, or even more if the employer acts timely to file a labor certification or immigrant petition before the end of the 5th year, is not a temporary visa. It is a half-way house towards the green card. Allow H1B workers to apply for adjustment of status without a current priority date. Final approval could not come until the backlogs caused by visa retrogression were gone. This is a small price to pay for a temporary H-1B.

  • Ban all H-1B Dependent Employers. Why should the vast majority of decent employers be burdened by over-regulation aimed at a few job shops? If the latter are the problem, Congress can ban them from sponsoring anyone for an H, thus liberating everyone else and undercutting whatever dim rationale for the LCA remains. No employer who is H-1B dependent should be able to file an H petition. End of story.

  • Require all H sponsors to prove the alien beneficiary is the most qualified applicant they can hire. Impose the same recruitment obligation that H-1B dependent employers now confront upon all H sponsors. There should be one key difference. Allow the employers to use the same recruitment they have already done to select the alien at the time of initial hire, regardless of how stale, and mandate acceptance of the "best qualified" standard that now only applies to university recruitment. No one in the real worlds outside the rarefied confines of 20 CFR 656 ever thinks in terms of minimal qualifications. Would you want to drive your car over a bridge designed by a minimally qualified engineer or allow a minimally- qualified surgeon to perform open-heart surgery on your mother? The question literally answers itself. It is perfectly fair to ask that employers explain their choice not to hire an American if they are allowed to use real world standards when doing so.

  • Make the H-1B completely portable. Give the alien ownership of his or her own visa. Allow self-petitioning for any employee under the H-1B category. Take the concept of H-1B portability all the way to its logical conclusion. Allow the alien to file an H petition much as he or she can now file a national interest waiver or extraordinary ability petition. The H-1B approval would then truly belong to the H-1B worker and not to the employer who then loses any leverage that the market would not otherwise provide. Armed with such a weapon to guard against unreasonable employer demands, the H-1B alien would have little interest in or need for a labor condition application which can thankfully be abolished. Whatever its motives, the practical effect of DOL's command and control mentality manages to deter H-1B compliance while simultaneously punishing employers for hiring H-1B temporary workers in the first place.

  • Create a Blanket H-1B. Create a blanket H-1B visa that can be applied for directly at a US Consulate, much as it is now possible to apply for a Blanket L visa. Eligibility for the Blanket H should depend on the number of approved H petitions in the past year, the percentage of full-time equivalent H workers in their employ (no eligibility for H dependent employers) and documentation of a demonstrated ability to pay the prevailing wage. No employer who is guilty of a willful or material H wage violation can apply. As with the Blanket L, initial Blanket H registration is for three years after which successful reapplication makes it permanent.

  • Create an H-1B Lottery. If the concept of a Blanket H seems to favor established employers or those with a multi-national business presence, why not allow potential H-1B beneficiaries to register for an H-1B lottery much as people now register for the Diversity Visa Lottery? Take the 65, 000 H-1B cap together with the 20,000 cap exempt allotment for advanced US degrees and let folks register on line for H numbers during a specified application period. Instead of the $75 fee that Diversity Lottery registrants pay, charge the winners of the H lottery the $1000 surcharge now levied against employers. The H Lottery winners come in for three years and get to work for anyone they want anywhere they want. They win, they pay, and the visa belongs to them.

  • Create a Schedule A Occupational List for the H-1B. Does the economy have the same need for all H-1B occupations? Of course Not! Prepare a list of occupations deserving of H approval. Annual revisions of the list will keep it current. For those occupations not on the list, they can still get an H visa but only for shorter duration and with no exemption from the intending immigrant presumption found in Section 214(b) of the Immigration and Nationality Act.

  • We have 5400 H1B visas set aside for Singapore and 1400 for Chile as a reward for free trade policies we like. The new E-3 visa for Australians is really a way to pay off Down Under for being a reliable commercial and foreign policy ally. The E-3 is a way to let our Aussie friends get around the H cap. What works for Chile, Singapore and Australia should work for other nations with whom we do business on a regular basis, such as Mexico, India and China. Congress may decide to base the level of future H-1B admissions on the extent to which the sending countries encourage or frustrate American investment in the same economic sectors that the potential H-1B beneficiaries work in. So, for example, if remittances sent by Indian software engineers from Silicon Valley are a vital source of support for the Indian economy, then the Indian authorities should be prepared to give something back in return and allow US companies to participate in the Indian technology boom on the same footing as an Indian firm would enjoy. This provides Americans with the same opportunity to penetrate the Indian economy that the US now gives India with reference to the American economy when Indian H-1Bs are employed in this country. Allowing an H-1B worker from India or China, or anywhere else, the freedom to work in the USA as an H-1B temporary worker is a conscious decision by Congress to share the fruits of our national plenty with others whose citizens have the talent to enrich us; our business partners should be prepared to reciprocate and demonstrate a willingness to level the playing field. We give them H-1B numbers and they open their markets to American capital. The extent of H-1B admissions from any particular country would be directly linked to their commercial cooperation with the United States. Why give it away for nothing?

  • If we have to have an H cap, why have a one size fits all approach? Any H cap should be set on a country-by- country basis that varies as the facts and circumstances of our economic relationships change. If such a nation-based H-1B cap is adopted, two things would happen immediately. First, the need for an overall cap would disappear. Second, almost overnight, opposition to H-1B migration would dramatically decline as even all but the most partisan critics would realize that, for the first time, H-1B policy would be nation not alien-centered, designed not to help the H-1B beneficiary, but strengthen Uncle Sam.

  • End automatic H entitlement and put a points system in its place. Right now, the H-1B is weighed down by a seemingly incurable case of galloping credentialitis. To degree or not to degree? That truly is the only question the USCIS ever asks in any H-1B case. Why? Who is a "professional" coming to do a "professional job" seems of far less consequence than who has the talent to do a job that needs doing. There is no reason why highly skilled workers without the proper educational pedigree are not let in. Such visa holders can be known as the H-1 Essential Workers ( H1-"EW") This all dates back to two venerable decisions established as binding precedent by an agency that no longer exists, Matter of General Atomic and Matter of Essex Cryogenics. Whatever the validity of professionalism being defined solely by virtue of a relevant university degree decades ago when college attendance was far less than today, there is no logical reason why the USCIS now should make a college degree the exclusive focus of its inquiry. Does the person have special talent? Do they show grit, inventiveness, self-discipline, an ability to adapt to different cultural influences? Do they have the ability to solve important commercial or technical problems? Right now, the USCIS could not care less No degree, no H approval. A formulaic view of the H-1B ignores the fact that this is a work visa that lives in the real world and should be based on things that the real world values. Education is one of those things, most certainly, but not the only one. In addition, look to fluency in English, age, specialized expertise in a shortage occupation or one of surpassing national importance, time spent in the USA, and a whole host of other real world factors that are predictive of an ability to contribute to the US economy. Until now, advocates of a points system have argued for its adoption solely with reference to immigrant visas. It can and should be used to determine the allocation of H-1B visa eligibility as well. Such a change is entirely in keeping with the common sense notion that it should be harder to come to the USA but easier to stay.

  • Create a discrete H-1 visa category to slow down, or perhaps reverse, if only to a small extent, the flight of computer-related and other white collar knowledge jobs out of the United States to foreign competitors. While the sheer number of such jobs in the USA continues to rise, America's overall share of computer technology employment is either stagnant or dropping. What does all of this have to do with the H-1B? Create a sub-category for the information technology sector known as the "H-1T" under which the US government would grant tax credits- perhaps a 5-year tax holiday on all federal tax liabilities- to any US company with a minimum number of H-1T workers to encourage the modernization of our IT infrastructure and keep some of these jobs at home. The tax credit would be contingent upon the employer being able to demonstrate a multiplier effect, namely that the H-1T hiring had increased corporate profitability and contributed to the hiring or retention of US citizens. Eliminate the degree requirement since this bears scant relation to IT expertise in many cases. Remove all artificial cap limits. If we can reward rather than punish US companies for talking advantage of the H visa program, perhaps that might help, even if only in small measure, safe the jobs of the US workers standing alongside them. At the same time, as more of the best IT minds leave their native lands for jobs here, the wages for such specialties back home are bound, over time, to rise so that the wage gap between the United States and our foreign sources of IT talent must and will shrink. By bringing the best IT minds to this country under the new H-1T program, we will remove the wage incentive that entices many of our largest employers to look elsewhere for their technology providers.
This is pre-eminently a time for innovation. Try something and, if that does not work, well then, try something else. True and lasting change, not more H numbers, is what America needs. Not all of these ideas may work if attempted, and some of them may not be consistent with others. So, what's the point? The point is that , in a global economy, all forms of capital, including intellectual capital, flow to their optimum destinations according to the laws of supply and demand. The American economy does not operate in a vacuum and assumptions to the contrary, the very assumptions that have dominated the H-1B to date, only enrich our foreign competitors while we all lose. The USCIS and DOL care about American workers but do not effectively express such concern through policies that make US companies less competitive and the US itself less desirable as a place for the world's creative elite to live and work. There is a better way where everyone benefits. We can, if we think and act anew, transform the H-1B from an endless source of controversy to a flexible weapon in our economic arsenal so that everyone profits. For those who think a new way is too complex, do we not have complexity now and towards what end? For those who shrink from the demands of change, or doubt what they can do to chart a new course, let them listen to the wise words of Robert Frost in his immortal poem The Road Not Taken that can, if we have the will and wisdom to hear it, still speak to us today: " Two roads diverged in a wood, and I - I took the one less traveled by, And that has made all the difference."