It Depends on What the Meaning of "Student" Is

By David North on August 21, 2014

You know whose side they're on when immigration lawyers talk about a "shortage of H-1B visas".

There are a lot of suggestions to the White House these days about how to write the perhaps forthcoming executive amnesty, and many industry-centric attorneys are eager to make sure that the proposed opening of the borders helps their fat cat corporate clients, as well as run-of-the-mill illegal aliens.

My favorite industry-tilted proposal is that of Roger Algase, and is included in an article in Immigration Daily's August 14 edition, entitled "Can the President Act of His Own to Relieve the H-1B Visa Shortage?"

The good news is that the lawyer says that the president cannot act directly to relieve the alleged shortage (we have, at any given time, something like 800,000 of these workers in the country, busily taking jobs legal residents could fill, and we need more?)

The bad news is that he has figured out a way that he thinks will meet the same goal indirectly by extending the post-graduation work period of many foreign students from 12 months to 29 months. Algase would do this through the control of the F-1 program by the Department of Homeland Security; DHS, among other things, has the power to define the term "student".

This sounds trivial, but DHS through both the Bush 43 and Obama administrations has decided that some former alien students may, for a period of 29 months, be defined as "students" while they work legally in the American economy. When I was growing up they would have been called "alumni".

Currently, alien alumni who have studied in one of the STEM fields (science, technology, engineering, or math) may work legally for 29 months; other alien alumni, who have studied other fields, can work, legally, for only 12 months after graduation. This is the Optional Practical Training (OPT) program, which is administered not by the government, but by the university that produced the alumnus. It is used by many corporations and by many alien alumni as a bridge between academic (i.e., F-1 status) and H-1B status.

Algase wants to extend the 29-month rule to all alien alumni as a technique to help ease the H-1B visa "shortage".

Over and above expanding the American labor force needlessly at a time of widespread unemployment, there are two other things wrong with his proposal:

  1. It will, in a manner described below, attack the sorely pressed Social Security, Medicare, and Federal Unemployment Insurance trust funds; and
  2. Ironically, it will not do much good for greedy employers who are aching for those H-1B visas.

One of the main policy problems with extending OPT working privileges for alien alumni is the fact that since the alumni are regarded as "students"; neither they nor their employers are required to pay payroll taxes. This oddity sets in motion two unattractive sets of forces.

Most jobs in America involve both employers and workers contributing to the Social Security, Medicare, and Unemployment trust funds. OPT workers, though employed in the U.S. economy and taking jobs that otherwise would go to American workers, do not contribute to these funds; and, worse, their employers do not either. These non-payments damage and weaken these funds, which are the mainstays of the few remaining efforts to ease income inequality in this country. So the employment of OPT workers should be discouraged, not expanded.

Further, savvy and selfish employers can, and do, seek out OPT workers for the savings they provide, which, as we calculated in an earlier report can be as much as $10,000 per OPT employee. This sets up the second built-in problem, the loss of jobs from resident workers (and H-1B aliens) to the favored OPT employees. This needless payroll tax break is not even mentioned in the Immigration Daily article.

But does the expansion of OPT time to non-STEM alumni help the employers, those unfortunate corporations struggling with the "H-1B visa shortage"?

Well, not much. The proposed Algase maneuver is a clever sleight of hand, and shows a thorough knowledge of immigration law. And, while alien college grads with non-STEM degrees might well be qualified for H-1B jobs, H-1B employers largely hire only STEM alumni.

The proposal would only help the odd corporation or university wanting to hire an art historian or language teacher and would not do much good for the employers who yearn for young, malleable, indentured computer programmers, most of whom have STEM educations. The latter are already eligible for the full 29 months on the OPT alumni program.

So, though the Algase proposal probably would not do too much additional damage to the Social Security system, for the reason just mentioned, there always should be a vigorous defense against any expansion of the OPT program.