How Many Americans Will Companies that Missed Out on the H-1B Lottery Hire?

Don’t count on many, if any and it’s not because Americans aren’t qualified

By Robert Law on April 13, 2022

Every year in recent memory, employers have combined to request more “temporary” white-collar foreign workers than the H-1B statutory cap of 85,000. As a result of this excess demand, U.S. Citizenship and Immigration Services (USCIS) runs a lottery to determine who gets the spots. When USCIS announced two weeks ago it had completed the lottery for fiscal year (FY) 2023, I wrote about how the Biden administration missed an opportunity to make the H-1B program more merit-based by spiking a Trump-era regulation that candidate Biden backed simply because it was a “Trump rule”.

Once the H-1B lottery is run, the focus tends to center on the makeup of the foreign workers who won the lottery. Generally speaking, this boils down to gender (male), nationality (Indian), sector (tech), and prevailing wage level (the two lowest). But what about the employers who did not get the (foreign) workers they claimed they needed?

Rarely, if ever, do they go on a recruiting spree to find Americans to fill those jobs. When subjected to scrutiny, this business behavior raises doubts about the legitimacy of all the jobs these companies claim they need to fill.

Let me explain. For starters, it is important to understand that every cap-subject H-1B has the same start date (October 1) regardless of the job or location. By law, the earliest a company can request an H-1B is six months before the new FY (April 1). And that is exactly what companies do: simultaneously requesting H-1B workers, which is what led to USCIS creating the lottery out of administrative convenience. While it is not unheard of for employers to hire workers weeks ahead of a start date, it is implausible that so many can legitimately know their business needs half a year in advance and be able to wait that long for the workers to start.

Next, there is no statutory requirement that businesses first try to recruit Americans, and fail, before seeking H-1Bs. This myth likely originates from the tech lobbyists marketing H-1Bs as “the best and brightest”, but that is deceptive branding. The lone requirement for “H-1B dependent employers” to first recruit Americans is bypassed by a loophole that allows these companies to pay their foreign workers $60,000 a year instead of seeking out Americans. Based on the high cost of living in areas where most H-1B employers are located and the average experience level of the foreign workers, that $60,000 salary is significantly lower than what a true market wage would command.

Putting this together, you see that the H-1B statute creates an environment that artificially inflates the demand for sought-after foreign workers. By way of example, let’s use FY 2020 "H-1B cap season" data since the March 29 USCIS lottery announcement failed to disclose how many H-1B workers were requested, only that the number exceeded the cap. For FY 2020, USCIS received 201,011 H-1B petitions in April 2019 for October 1, 2019, start dates. That means employers collectively missed out on 116,011 workers they claimed they needed. But curiously, with six months advance notice, those same employers didn’t pivot to recruiting on college campuses where seniors were set to graduate within six to eight weeks. Are we really to believe that every college graduate had a job lined up months before graduating? The economy was booming during the Trump administration, but it wasn’t that good. As it turns out, at least one-third of recent college graduates with STEM degrees work in non-STEM jobs.

So where did all of those jobs go? It’s almost like they only exist if businesses can secure access to cheap, immobile foreign labor. Otherwise, tech employers seem content to just squeeze more out of the existing workforce.

Foreign-worker programs are meant to supplement the American workforce when employers legitimately cannot meet labor needs after boosting wages and working conditions. Instead, users of the H-1B program use it to supplant their American workforce and cite the “high demand” as evidence to encourage Congress to give them access to more foreign workers.