U.S. Makes It Easier to Use the H-1B Program and to Displace U.S. Workers

By David North on August 27, 2021

When a foreign worker program becomes less expensive to employers – despite no reduction in the size of the foreign work force – it becomes even more attractive to them, and they are even less likely to hire American workers.

Bear in mind that something like 800,000 jobs are lost to citizen and green-card workers, at all times, because of the H-1B program.

Over the last two years the costs of applying for the H-1B program have dropped by what I estimate (see below) to be something like $143 million, while there has been no apparent reduction in the size of that work force. Every year Homeland Security issues 85,000 new H-1B visas under the legislated ceiling, and tens of thousands of others to universities and non-profits. Then there are many extensions, usually for three-year periods.

The exact mix of causes of this drop in expenses is not known, but it is probably a combination of a changed application process, Covid-19, and happenstance. But whatever the causation, the employers who would not hire American workers came out ahead.

The basis for the estimate (but not the estimate itself) comes from an unlikely source, the pro-H-1B myvisajobs website. It shows that the number of H-1B applications fell from 548,237 in October 2018-June 2019, to 405,626 in the comparable period two years later. (See the table below).

In earlier years, an employer wanting, say, 100 H-1B workers might file 200 or 300 applications on the grounds that the annual allotment of new H-1Bs would be oversubscribed and that the resulting lottery would get him about the 100 he wanted. Each of these 200 or 300 documents ran ten pages or so, and was expensive to complete and file; most employers used lawyers, or non-H-1B workers, to do the work, and I guestimate that each application costs something like $1,000 to file. So a drop in applications by some 143,000 produces an estimated savings of $143 million.

Then, in 2019, the government announced that employers could keep their places in the lottery by filing a one-page form and only had to complete the full form if they, in fact, got a slot from the visa lottery. This, of course, was hailed by DHS as a bit of streamlining, and thus a good thing; who could not praise an end to wasted motion?

The problem, of course, is that making the H-1B program even more of a bargain than it already was to employers reduced further the possibility of the employers turning to the U.S. labor market to hire trained and available U.S. workers, both citizens and green card holders. But what employers want, employers get.

The numbers for four nine-month periods that myvisajobs released are shown below:

Department of Labor Decisions on All Types
of H-1B Applications, 2017-2021

DoL Decisions 10/17 - 6/18 10/18 - 6/19 10 /19 - 6/20 10/20 - 6/21
Total 533,956 548,237 459,989 405,626
Certified 509,477 525,237 455,560 395,849
Denied 7,159 4,082 3,511 2,175
Withdrawn 17,320 16,380 918 7,602

Source: myvisajobs.com website.

Please also note the yes/no ratios shown; in other words, the relationship between the certifications and the denials. In 2017-2018, the Department of Labor turned down one application compared to 74.6 approvals; by 2020-2021, the ratio had increased to one denial to 182 approvals. Both ratios could be reflecting rubber-stamp operations. In what population of 182 is there only one bad actor? What a wonderful, squeaky-clean environment there must be in the H-1B program!

A tally of the winners and losers in this situation shows:

The only winners:

  • U.S.-worker-avoiding (H-1B) employers, who save $143 million a year.

The losers:

  • U.S. workers with H-1B skills, jobs in the hundreds of thousands
  • U. S. white-collar workers, 1,900-person years; who would otherwise fill out applications; and
  • The hard-pressed USCIS, which also loses a part-year, interest-free loan of nearly $300 million.

The Estimates Explained. I figure that the 2019-2021 decline in applications filed was about 143,000, and that the preparation cost of a typical application, often completed by lawyers, was about $1,000 each, thus a savings to the employers of $143 million. If people working on the applications were paid $75,000 a year (another guestimate of mine), that would come to about 1,900 full-time jobs.

Meanwhile, the fees charged (by DHS) are as follows:

Basic   $460
Anti-fraud   $500
Education fund   $1,125 (Avg.: $750 for small employers and $1,500 large ones.)
Total   $2,085

In the past, the H-1B employers were obliged to pay these fees up-front; later, when the numbers of jobs were determined by the lottery, the overage was returned to them, but by that time months had passed and USCIS had the interest-free use of the funds.

So, as to the interest-free loan lost by USCIS (which is funded primarily by such fees), we have an estimated 143,000 multiplied by an estimated $2,085, which equals $298,155,000.

All of these are ballpark estimates, but they do give the reader a sense of the actual costs of these concessions to the H-1B employers; even if applications, on average, cost only $500 each, it still would be a $71.5 million gift to the employers. A reward, if you will, for not hiring citizen workers.

Further, these losses to the government, and to American workers, are totally hidden.

Come to think about it, I have never seen these losses described in print.