Facts About H-1B Workers and the Innovation Economy

shutterstock_109889270While widespread research documents a critical need for skilled workers in the United States to maintain and strengthen our innovation industry, myths exist in opposition to programs designed to help alleviate that shortage. In particular, the H-1B visa program for high-skilled foreign-born workers, primarily used for science, technology, engineering, and mathematics (STEM) fields, is a routine recipient of critical ire. As the Senate Judiciary Committee discusses H-1B reforms in Title IV of S.744, here we dispel some of the common myths associated with the H-1B high-skilled visa program.

Fact: There is a growing shortage of STEM talent while innovation industry opportunities are growing.

In the short-term, there is a need to attract and retain foreign talent to fill science, technology, engineering, and math (STEM) labor market gaps. Over the long-term, we must focus on strengthening STEM education at all education levels in the United States to ensure an adequate future supply of STEM workers.  Specifically, as innovation and technology use increase, many more companies beyond STEM-defined fields are part of a broader competition for STEM competencies.

Fact: High-skilled foreign-born workers supplement the native-born workforce and employers request H-1B visas for hard-to-fill jobs.

The metropolitan areas and occupations in which employers most request H-1B visas correspond to places and jobs where there is the greatest demand for skilled workers. In particular, a 2013 study shows that in the 100 largest metropolitan areas in the United States, 46 percent of job openings requiring significant STEM knowledge go unfilled for one month or longer. Furthermore, STEM employers report thousands of unfilled positions. In 2010, despite the ongoing recession, San Francisco and San Jose, California, had 25 and 19 job openings for every computer graduate, respectively.

Fact: H-1B workers often have a positive impact on wages nationally and locally.

Despite rhetoric to the contrary, a one percent increase in the foreign-born STEM worker share of total employment in a city over a decade increased the wages of STEM and non-STEM native-born college-educated workers by 4 to 6 percent. Additionally, for occupations with the most H-1B requests, wage growth in recent years has been much higher than the national average. And in the metropolitan areas with the largest number of H-1B requests, the average wages for STEM occupations with H-1B requests are extremely high.

Fact: Employers across America, from large companies to small businesses, request H-1B workers to alleviate gaps in their workforce with low levels of fraud.

The H-1B visa program already contains important safeguards to protect the U.S. workforce, and U.S. employers generally do not abuse the program. Program safeguards require employers to pay H-1B workers the prevailing wage or actual wage paid to U.S. workers, whichever is higher, and by requiring that H-1B workers receive the same benefits. In general employers do not currently abuse the H-1B program, as shown by the low level of fraud referrals (1 percent of around 30,000 audited H-1B visas in 2010).

Fact: H-1B workers are hired mostly in STEM and innovation industry occupations, which have low unemployment and large multiplier effects, leading to the creation of more jobs.

Long-term research shows that innovation industry multiplier effects lead to broader job creation in the communities where innovation jobs cluster. Indeed, an analysis of 11 million American workers in 320 metropolitan areas shows that each new high-tech job in a metropolitan area creates five additional long-term local jobs outside of the high-tech sector across the skills spectrum. In many U.S. metropolitan areas, the innovation economy, and the high-skilled jobs related to it, drive prosperity for the broader region’s population.

In summary, STEM skills are critical to America’s innovation industry nationally and locally. As such, the H-1B program contributes to meeting the need for STEM talent by filling gaps in the high-skill labor market. The challenge, therefore, is to strike the right balance between worker protections, enforcement, and program efficiency.

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