H1-B Deadline Soon, New Regs for H-4 and EB-5 Are Coming a Little Later

By David North on February 26, 2019

Looking at the near, and not-so-near horizons, there are three processes in motion that will affect the flows and status of middle- and upper-class migrants: H-1B workers and some of their working H-4 spouses, and EB-5 investors.

H-1B Petitions. The most prominent and soonest of these will take place on April 1, the deadline for the filing of initial H-1B petitions, for college graduate workers, mostly in the high-tech fields.

The question is not whether the filings will exceed the ceilings of 65,000 workers (for all academic levels) and 20,000 (for those with U.S. master's degrees); that is all too likely to happen again this year. Instead, the question is whether the total will fall again, as it has done in recent years. There were 236,000 filings in 2016; 199,000 in 2017; and 190,000 in 2018.

Will that downward trend continue, or will the gaming of the expected lottery lead to a higher total of applications? Many employers overstate their wants (which they call their "needs") by two or three to one, to cope with the expected over-subscriptions. That these totals have fallen for the last three years is never mentioned; all we hear about from the industry and the media is the gap between the 85,000 and the number of filings.

It is well known that the H-1B-created availability of these masses of foreign workers has reduced U.S. workers' wages and altered working conditions in those areas where the H-1Bs cluster, as Professor Ron Hira of Howard University has shown repeatedly.

Meanwhile, in the last few days, two sets of proposed regulations have been forwarded from the Department of Homeland Security to the Office of Management and Budget for review. One of these deals with eliminating the current right to work legally for the spouses of H-1 workers (who have H-4 visas) and the other with proposed reforms in the EB-5 (immigrant investor) program.

H-4 Visas. Those currently working with H-4 visas number perhaps as many as 100,000 people. This population is not some random sampling of alien workers, or of their spouses, as it consists almost exclusively of women from India, many of them college grads.

Why this concentration? Because the U.S. government — Congress as well as the Executive — have ignored, and thus tolerated, the most outrageous ethnic discrimination on the part of the Indian outsourcing companies, such as Tata, Cognizant, and Infosys, firms that routinely discriminate at the rates of 98 percent and 99 percent in favor of hiring Indians within the H-1B program, and, more specifically, they usually hire young Indian males from the South of the country.

So who do those young male, largely Hindu, Indians, marry? Well, as you might predict, slightly younger Indian women from the same part of the nation.

The Obama administration decided earlier to let some of these H-4s work legally; they are not tied to any employer and are not subsidized, as OPT workers are, but their ability to work makes one set of employers happy — the companies that had hired their husbands; there is less pressure on the firms to give the men a raise as long as their spouses are employed.

By the way, India, which very much wants these women to work in the United States, has, for some reason, not allowed U.S. spouses of the few U.S. temporary workers in India to work legally. It finds itself in the awkward position of asking for something here that it will not grant back home; the latter could be done with the most minimal impact on the Indian economy.

My sense is that reversing the Obama-era decision will be more attractive to the administration than playing to the indirect benefits for the companies that hire the spouses of H-4s, and that the termination of work permits will be finalized. Unlike the expected EB-5 decision, this one cannot be nuanced: Either these women (and a few men) can work or they can't.

Pending EB-5 Regulations. The third of these three elements is the much more complex set of questions involving the smallest of these populations: the 10,000 or so aliens a year who can get green cards by having a member of the family invest $500,000 or more in the EB-5 program.

The problems with the EB-5 program are numerous, serious, and complex, and have virtually nothing to do with the alien investors, (who sometimes get cheated); rather they relate to what happens to their money once it enters the U.S. economy.

When the investment funds are not stolen by U.S. middlemen, they are usually used to increase the profits in already prospering big-city real estate deals, which get access to remarkably inexpensive project financing. Think Manhattan, Dallas, and L.A. The original supporters of the program expected that the money would finance economic development in depressed parts of the United States. That has not happened.

Late in the Obama administration, a comprehensive set of recommended changes in the regulations was offered. These increased the minimum level of investments from the current $500,000, made some different security arrangements, and changed the rules about where investments may be made to encourage more in rural and depressed areas. The recommendations were met with approval at the time by the then GOP and Democratic leaders of the House and Senate Judiciary Committees.

Three of the four leaders at that time are no longer on those committees, but Sen. Schumer (D-N.Y.), the minority leader of the Senate, a major supporter of EB-5 just as it is now, is still very much in the picture, as is the Kushner family, which has used EB-5 funds in both Manhattan and in Jersey City, on the other side of the river. And the entire EB-5 industry is firmly opposed to anything but cosmetic changes to the program.

After all this time, with still more time to come, it seems unlikely to me that a useful set of changes in the EB-5 program — such as those as spelled out by the previous administration — is likely to emerge from OMB.

For a different point of view, and I might add, a very well-written discussion of these developments, see here.