H-1B visas do not create new jobs

Back on Oct. 25, 2005, I published excerpts from a study by John Miano, a member of the board of directors for the Programmers Guild, which refuted claims, using the government's own labor and wage statistics, that those working on an H-1B visa in high tech were receiving equivalent salaries to U.S. citizens. The point of the column was to shed light on emerging evidence that companies might in fact be using H-1

Back on Oct. 25, 2005, I published excerpts from a study by John Miano, a member of the board of directors for the Programmers Guild, which refuted claims, using the government's own labor and wage statistics, that those working on an H-1B visa in high tech were receiving equivalent salaries to U.S. citizens.

The point of the column was to shed light on emerging evidence that companies might in fact be using H-1B visas not as a way to fill in skills gaps but as a way to hire cheap labor at the expense of both U.S. and foreign national workers.

[ If your tech job has moved overseas, can you move with it? Find out in InfoWorld's special report. ]

Miano has now published a new study with the Center for Immigration Studies. This one, titled "H-1B Visa Numbers: No Relationship to Economic Need," refutes the claims made by some that the granting of H-1Bs creates more job opportunities for everyone in high tech.

Everyone from Bill Gates to prestigious business publications such as The Wall Street Journal and The Economist has claimed that for every H-1B visa granted, between three and five new jobs are created.

Gates stated his claim in testimony before Congress this year: "Microsoft has found that for every H-1B hire we make, we add on average four additional employees to support them in various capacities."

To support its claim, the Journal cited a study by the National Foundation for American Policy called "H-1B Visas and Job Creation." According to the study's regression analysis of H-1B filings and employment at U.S. tech companies, the Journal said, "the data show that for every H-1B position requested, U.S. technology companies increased employment by 5 workers."

Miano blows those claims apart with simple arithmetic.

Using public data, Miano says that if the H-1B program is creating five jobs for each visa, then logically with 100,000 H-1B visas issued last year, there should have been at least 500,000 new high-tech jobs. Obviously, this was not the case. Actually, approximately 63,000 jobs were created during 2005. Miano's figures are from the U.S. Citizenship and Immigration Services, which announced 116,927 H-1B visas for 2005 and 130,497 for 2004.

"I only use the number of new visas, not renewals and transfers in my studies," Miano tells me. Miano goes on to point out that not only are H-1Bs not creating new jobs, but in fact, "the U.S. is approving H-1B visas for computer workers at a rate to fill at least 70 percent of the computer jobs created."

Another interesting stat from the study is the fact that on average there are about 49,000 new H-1B visas approved for computer workers under the current law. (The rest of the 65,000 visas issued annually go to people working in other technology areas.) So at an annual U.S. growth rate of 63,000 new computer jobs per year, the number of H-1Bs will be enough to fill 78 percent of the growth.

Finally, Miano looks at engineering jobs and finds that the discrepancy between available jobs and visas issued is even worse.

"Every year since 2001, the number of H-1B visas approved for engineers has been greater than the number of engineering jobs created." Since 1999, there has been a net loss of 76,000 engineering jobs, while during the same period the United States has approved on average 16,000 new H-1B visas each year for engineers.

The key finding is that there is actually no cause-and-effect relationship between H-1B visas and job creation. So, first companies claim there is a labor shortage and that's why they need H-1Bs. Now, the strategy is to claim that not only do they need H-1Bs, but somehow the visa class creates more jobs than it takes away.

Who are they kidding?

Let's call it as it is. The first Miano study put the lie to the fact that workers on an H-1B visa are making equivalent salaries to U.S. workers. Now, the second study by Miano puts the lie to the claim that new jobs are created because of the H-1B program.

Cheap labor is what this is all about. There would be no rush to bring in workers on an H-1B visa if a company wasn't saving money. End of story.

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