labor based immigration: the h-visa program afl-cio cornell institute for public affairs

LABOR BASED IMMIGRATION:

THE H-VISA PROGRAM

AFL-CIOCornell Institute for Public Affairs

Cornell UniversityCornell Institute for Public Affairs

American Federation of LaborCongress of Industrial Organizations

H-1B Visa



Literature Review

Research Methodology

Research Questions and Associated Policy Recommendations

Conclusion/Summary Findings

Paper Sections/ Outline



Literature ReviewApplication Process/Key Statutory Provisions

H-1B Visa Cap

Prevailing Wage

The Importance of STEM Industries/Professions

H-1B

Department of Labor

Department of

Homeland Security

Department of State



Literature Review- Key Findings Pervasive uncertainty and controversy regarding

about the effects of the program upon the domestic labor market

Severe lack of accurate and complete micro-data

Most studies are descriptive in nature- data corruption and incompleteness prevents more detailed analyses

Weak enforcement efforts by agencies

Responsibility for administering the program is widely dispersed and fractured across agencies

Few formal information-sharing efforts across agencies.



Research Methodology Primary and secondary sources

informed our analyses

Research limitations



Research Questions1. Legislation

In the form of a legislative bill, what changes should be made to the H-1B visa program? In particular, does past legislation provide a roadmap for future legislative remedies?

2. Auction SystemWould an auction system successfully address the problems previously identified with the quota cap system? Would such a system improve the fairness of outcomes for workers and improve efficiency in the labor market?

3. Agency Data Systems/Reforms in Data Reporting and GatheringWould more detailed, accurate, and more easily available data improve the ability of policymakers to: (1) capture the size and characteristics of the H-1B worker population, (2) estimate the effects that the program has upon the domestic labor market (3)detect fraud and misconduct and (4) improve the program’s transparency? Should these reforms to data gathering and reporting systems include a central data clearinghouse that each agency could freely use?

H-1B



Legislative Remedies H-1B

Overview of Analysis: 115 Proposed Legislative Bills 2007 and 2009 Durbin bills Common issues and controversies Likelihood of Immigration Reform



Policy Recommendations - Legislative Remedies

Increase funding, investigative and enforcement powers of DOL

Tri-Department Clearinghouse Data System

Increased incentives and punitive measures

Eliminate loopholes



Auction SystemsGeneral goals common across all proposed auction

systems include: (1)Improving labor mobility (2)Improving the leverage of workers to negotiate

with firms,(3)Creating price signals for policy makers to adjust

the number of visas issues each year (4)Increasing elasticity of labor supply and reducing

deadweight losses in the labor market (5)Accounting for worker heterogeneity even within

professions in a systematic way

H-1B



Three distinct auction systems were considered:

(1) Employer based system by Orrenius and Zavodny

(2) Employee based system– employees own visas, visa prices are variable

(3) Employee based auction system- employees own visas, visa priced are fixed, employers bid on wages with prevailing wage by profession and region as the minimum required bid for each auction.

Auction Systems



Employer-Based Auction System H-1B

Employer

Employer

EmployerEmployer

Employer

Employer

Employer

EmployerEmployer

Employer

SecondaryVisa

Market



Common Operational Features of Each Auction SystemReal-time auction (Ebay

type) Dedicated auction sitePre-determined quantity cap



Employer vs. Employee-based Auction systemsH-1B

• Expected Costs and expected benefits• Lack of data and points of comparison• Implementation



Auction System- Policy Recommendations Keep the current visa cap system fundamentally in place but experiment on the margins once the existing cap is reached in the coming years by: Creating Pilot Programs (1)Employer-based(2)Employee-based Finance further research into the effects of each pilot Finance additional research of alternative auction

systems



Agency Data System – Current Challenges

Major problems with current systems for collecting, organizing and reporting data include: (1) Lack of transparency (2) Lack of coordination(3) Incomplete, inaccurate, or absent data(4) Opportunity for fraudulent and dishonest practices



Proposed Solution- Centralized Data System

Department of Labor

Department of

Homeland Security

Department of State

Tri-department Clearinghouse



Centralized Data System-Policy Recommendations

H-1B

Department of Labor

Department of

Homeland Security

Department of State

Tri-department Clearinghouse

Create modest new annual reporting requirements that discentivize fraudulent or dishonest practices. These would also include a unique identifier for each worker and submitting W-2 information to the DOL on an annual basis.

Improve the capacity of agency officials to enforce labor standards through the creation of a more detailed record

Improve the capacity of stakeholders in the business community, labor organizations, government agencies, academia and elsewhere to analyze the program, the effect of the program’s outcomes.



Conclusions/Summary of Findings

(1) The fragmented and severely incomplete data about the population of H-1B workers creates significant difficulties in trying to rigorously estimate the effect that the program has upon the wages, employment, productivity, and working conditions of both foreign and domestic workers.

(2) The authority to administer the H-1B program is heavily fragmented between the Department of Labor, the Department of Homeland Security, and the Department of State. In turn, this significantly limits the capacity of those agencies to detect, investigate, and deter fraudulent, dishonest, or abusive practices among participants of the H-1B program.

(3) The current visa cap system is an inefficient way of allocating H-1B visas that is largely unrelated to the demand for foreign workers at any given wage or skill level.

(4) Prevailing wages are a source of continuing controversy and have both direct and indirect impacts on all major efforts to reform aspects of the H-1B program.

labor based immigration: the h-visa program afl-cio cornell institute for public affairs

Documents

public affairs slide

b slide

b visa slide

b visa program

data reporting

available data

agency data systemsreforms

b visa cap prevailing