Reports on the Number of Subsidized OPT Workers Are Opaque and Tardy

By David North on February 11, 2020

I'm not saying it is deliberate, but if one were to want to mute criticism of the Optional Practical Training program — which subsidizes employers for hiring alien graduates of American colleges, rather than citizen or green-card graduates — one would present data in the following format, and would do so very slowly.

What follows is recently released data on the 2018 results of the program — not 2019 results. What you see is exactly what Homeland Security published, though the table headings for Table 1, Table 2, Table 3, and Table 4, are our own additions.

Table 1

Table 2

Table 3

Table 4

The reader is faced with a mass of numbers, mostly related, as so often in the government, to workload data rather than to easier-to-understand population information. The reader sees data reported, respectively, in four rows, in a single row, and twice in three rows. All jumbled together are data for three aspects of the OPT program (OPT per se, STEM OPT, and CPT (Curricular Practical Training)), which provide both controversial and non-controversial benefit packages, as well as information on what appears to be three different measures:

  • Authorizations to work in the United States in the OPT programs (the first step);
  • The existence of employment authorization documents (the second step) in a given year; and the
  • Granting of such permits in a given year, with some of the permits being valid for more than one calendar year.

These last two items are different ways of measuring the size of the same workforce. I see no utility in reporting both; it just adds to the confusion. In Tables 1 and 2, it is calendar-year data; in the other two tables, the definition of the year is not specified.

Further, in Table 1, data are provided on OPT and on STEM OPT in different rows, each with a white background, then immediately below in a grey background row, as if summed, there are figures for "Total SEVIS IDs w/OPT"; however the data in the white rows, when added, does not equal the totals in the grey row. ("SEVIS" is the Student and Exchange Visitor Information System.)

And all of this with no explanation beyond the opaque headings of the tables.

In addition, of course, DHS writes about "students", when both OPT and STEM OPT deal only with college graduates — alumni, not students.

If the reader is not confused at this point, she is either a savvy DHS statistician or, more likely, not paying attention.

As background, the Bush II administration created, the Obamas expanded, and the Trumps have preserved OPT as a way of increasing the foreign workforce by hundreds of thousands without seeking permission from Congress. They did so by defining college graduates as "students" and thus making the alien alumni — but no American alumni — eligible for a subsidy.

There is a totally understandable tax break for many college students, be they citizens or aliens; they get to work during the school year without paying into the Social Security, Medicare, and Federal-State Unemployment Insurance trust funds. This is as true for the aliens under CPT as it is for citizen and green card students, and hence CPT is not particularly controversial.

But after graduation the big gap occurs — the aliens, now re-defined as "students", get the tax break, as do their employers, but the citizen graduates (and their employers) do not. So if an employer is looking at two equally qualified job applicants, both recent college graduates and both willing to work for $50,000 a year (a recent average salary for new college graduates), one an alien and one a citizen, that employer may very well prefer the alien who will be $4,000 a year cheaper than the citizen. Payroll taxes come to a little over 8 percent of the paycheck; in OPT, neither worker nor the employer has to pay the 8 percent; the trust funds lose bundles as a result.

The two parts of the OPT program that subsidize the alien alumni are the first year, or the OPT per se period, of the subsidy; if the alien alumnus has (as many of them do) a major in the fields of science, technology, engineering, or math (STEM), then the subsidized employment can go on for as much as two more years, for a total of three years. Many in these categories use OPT as a middle step while waiting for a slot as an H-1B worker (where there is, appropriately, full payment of payroll taxes).

If that is not complicated enough, there are two steps within the OPT alumni program that are covered by the previously shown data, but not really explained. An alien graduate gets an authorization from his or her university to seek OPT (and OPT/STEM) work; and then, in another step, after securing a job offer, the alien files for an employment authorization document (EAD) from U.S. Citizenship and Immigration Services.

I tried to get an explanation from the Student and Exchange Visitor Program (SEVP) as to why there were, for example, 69,650 "students" working in the OPT/STEM Program in 2018 (see the last row of Table 1) while in the same year, in Table 3, we see 118,660. I was told that the two items are not comparable, which is accurate, but not very helpful. I was further told that there are some overlaps among the three categories of OPT; one might be working under CPT and have received an authorization for OPT, for example.

My sense is that there is a serious drop-off in STEM/OPT participation from a university authorization to the granting of the EAD because of two main factors: (1) sheer passage of time; and (2) the intervention of the H-1B program. Other possibilities include that some of those with authorizations, but not EADs, leave the country. Also, some may find a way to work, presumably illegally, with an authorization, but without an EAD.

In any event, DHS should produce an easy-to-understand set of data on OPT workers and might — gasp! — actually report that each of them, and each of their employers, is getting a subsidy on the grounds that they are not U.S. citizens or green card holders. An odd reason for a subsidy.

The latter admission is probably too much to expect.

So How Many OPT Workers Are There? Just dealing with OPT and OPT/STEM, and ignoring CPT for the moment, just how many former foreign students got these subsidized jobs in 2018?

Table 1 shows 145,564 in 2018 for OPT, and 69,650 in OPT/STEM, for a combination of 215,214.

Table 2 shows a total of those in SEVIS with OPT of 208,065.

Table 3, dealing with authorizations rather than work permits, shows a combination of OPT and OPT/STEM at 407,075, which was up from the comparable figure of 383,201 in 2017 found in Table 4.

Further, if one looks at the comparable numbers for 2017 and 2018, one finds that four of the comparisons show a decline and four an increase.

With all this in mind, I would say that there was little net movement from year to year, and that 200,000-plus would be a plausible estimate of the size of the subsidized workforce in the two alumni programs, OPT and OPT/STEM, in 2018. But the public should not have to go through the gyrations described above to get the real number of alien alumni in these programs.

The apparent fact that OPT was running at something like the 2017 level in 2018 is encouraging, after years of constant expansion. And though I hate to be proven wrong, it is good news for the nation that the number of such alien workers is closer to 200,000 than to 300,000, as I previously estimated, based on authorization data, rather than the more pertinent EADs.

One other thing is perfectly clear, as two other tables provided by SEVP show (here and here) that with this program, like H-1B, a majority of workers come from India. In 2017, that percentage was 55.6 percent and in 2018 it was 59.4 percent. The number of Indians in the program in 2018 was 70,521 (by the measure used in these tabulations) compared to 25,843 from China, 2,086 from South Korea, 1,677 from Taiwan, 1,355 from Iran, and 1,268 from Nepal; no other country breaks the 1,000 mark.

That we are subsidizing employers to hire Iranians rather than Americans in this program — in total contrast to our general policy of seeking to cripple the Iranian economy — is noteworthy, to say the least.