Mea Culpa -- Sadly I Was Spun by that Skilled Spinner, Sen. Schumer

By David North on August 8, 2010

I must admit that I was more than a little naive when I wrote a blog entitled "A Double Whammy in That Appropriations Bill" regarding last week's Senate vote on a supplemental appropriation bill involving both border enforcement and higher fees for the H-1B and L-1 visas.

"Some of the funding," I wrote, "for the additional enforcement – will come from discouraging nonimmigrant worker programs, a small-scale double whammy."

Very small scale, in turns out.

While noting that Sen. Charles Schumer (D-NY) was offering a comparatively minor bit of money in order to open the way for a large amnesty, I fell for the concept that the senator was proposing in terms of limitations of the H-1B and the L-1 nonimmigrant worker programs, both heavily utilized by American employers. Upon examination of the actual text of the bill, and a discussion with the nation's leading expert on H-1B, Prof. Norm Matloff of UC-Davis, I found out the following:

1) Very few employers of H-1B and L-1 nonimmigrant workers will be touched by the bill which requires an extra $2,250 fee for some H-1B workers, and $2,000 for some L-1s. Only those employers with both 50 or more H-1B workers, AND with 50 percent or more of their staff with H-1B visas would be covered by the higher fees.

These employers, mostly firms based in India, often operating as bodyshops (i.e., employment agencies rather than real employers) were unhappy about the legislation as a Wall Street Journal article pointed out – but that is only a tiny bit of the story.

"Last year," according to a Washington Post story, "out of 121,000 H-1B visas issued by the U.S., Indian companies got only 12,000 visas."

In addition, the demand for these visas has dropped sharply as a result of the weakened economy. While usually at this time of the year the next fiscal year's quotas are more than filled, as of July 30 there were only 38,900 applications against the available 85,000 H-1B visa slots. (Of these, 65,000 are for all eligibles, and another 20,000 are set aside for those with master's degrees.)

So . . . not many employers will be paying the extra $2,250 fee, and over a six-year time span, the maximum for H-1s, that comes to less than $400 a year. (Employers like the program because it allows them, in fact, to pay less for imported workers than they would have to pay were they to face the American labor market.)

2) The other missing element of the story, as Professor Matloff explained:

The legislation is based on the premise that the main abusers of H-1B are the Indian bodyshops, and that the Intels and Microsofts use the program responsibly. This is absolutely false. But it has been the strategy of the lobbyists from Intel/Microsoft/et al. from the beginning, and this legislation is a VICTORY for them. It's not a coincidence that the author is Schumer.

He concluded: "I consider the bill to actually be a loss, not a gain, as it gives Congress [an image of being able to] 'declare victory and go home' on the H-1B issue, washing its hands of the whole thing."

All perfectly true. As one who has written recently about the need to get more federal money from the migration process, such as this report for CIS, I guess I was swept up by the idea that the Senate had actually voted to raise visa fees for at least some of these nonimmigrant workers.