High-Skilled Immigration in High-Skill Labor Markets: The Impact of the H-1B Visa Program on the Employment of Workers in the STEM Industries in the United States

Over the last three decades, the conversation about the United States’ immigration policy has been largely focused on restricting the migration of those perceived to be undesirable, namely undocumented immigrants who are often uneducated and unskilled, with research and policy proposals frequently following the same narrative. In recent years, however, the scope of the United States’ immigration policy debate has shifted from restricting the uneducated to focusing more on attracting high-skilled labor overseas to work, and perhaps live, in the United States. Some have argued that these highly skilled immigrants come with a set of knowledge that can greatly benefit the United States’ economy, but others fear that these same people will put American jobs at risk. In 1990, Congress passed the Immigration and Nationality Act, which exemplifies the tension between two seemingly conflicting goals: attracting highly skilled immigrants to assimilate into the United States and contribute economically while ensuring their American counterparts are not displaced as a result of their being here. In the act were the most sweeping revisions to the nation’s immigration system in more than a quarter century. The act would allow up to 700,000 new immigrants to be admitted to the states annually (up from 500,000), continue to favor people with family members in the United States, and added a preference to admit more immigrants, especially those with the education and skills needed in the United States, through work visas. The newly created visas would become a topic of high contention; but one, in particular, would be the poster-child for both sides of the immigration policy debate: the H-1B program. The program would allow skilled workers into the U.S. to work for up to six years with the opportunity to renew their visas to stay and work in the U.S. The program came with other stipulations, such as a cap of 65,000 annual visas for the program, which changed for a few years before reverting to the current cap of 65,000. The cap is often criticized by many as an impediment to the economy as the U.S. is suffering from a labor shortage whereas others claim that the program and any further expansion of it is just the U.S. capitulating to the interests of businesses who would rather hire cheaper labor than train available domestic workers. This reflects a huge gap between supply and demand in the American labor market with regards to those involved in STEM, a situation that is affecting both workers and businesses in a significant way. There has been a lot of literature published concerning the topic of immigration and its effect on the employment status of workers in the United States. This paper, however, specifically looks at the effects of the H-1B visa program on the employment of workers in the United States and makes recommendations based on its findings. It tries to answer the question of whether high skilled foreign workers are dislocating domestic workers and depressing their wages, or if our workers just are not qualified