Uncle Sam Dumbs Down the Population of H-1B Winners in New Regs

By David North on February 2, 2024

The U.S. Government has managed to make the H-1B (high-tech) foreign worker program worse than before in its new regulations, which do little to protect U.S. workers and makes it certain that the quality of this foreign workforce will decline in the future.

It is a remarkably negative accomplishment for the Department of Homeland Security.

Among other things, the new policy totally ignores the new reality that the high-tech industry shed nearly a quarter of a million jobs last year; it is going to admit some 100,000 new alien workers anyway this year. The job loss of 240,000 last year was announced by TechCrunch a few days ago.

With that in mind, Congress should have given us a one-year’s vacation from the H-1B program, but that has not even been mentioned.

Let’s see how two different Indian candidates for H-1B fare as they move through the four steps of the new H-1B program (Indians routinely dominate the H-1B scheme). We will refer to them on this imaginary trek as A and B. Both of them are India-born, both are young males, both are Hindus, both come from the South of the country, and both are from one of the upper castes, in other words they each have the full set of characteristics that lead typically (if not fairly) to H-1B employment. They both belong, in short, to the elite group that gets these jobs in real life in a system that discriminates against women, people from the north of India, Dalits (untouchables), and the like, as we have reported in the past.

But within this elite framework, A and B are quite different. A gets excellent grades, is both salutatorian of his class in a prestigious school in India, and is the captain of the cricket team. B is lucky to get C+ grades, and does nothing extra-curricular at a lesser school. Both want to come to America in the H-1B program. Here’s what is likely to happen in the four-step process (something I have not seen described before).

Stage One: Admission to an American College. Both apply to multiple universities; A gets a bunch of acceptances and opts for the one he gets from Yale. B receives only one acceptance, to a lesser institution in Appalachia. A gets a partial scholarship, B’s family has to pay the full freight. Talent wins.

Stage Two: The OPT Program. Both complete college in four years, and both make multiple applications while seniors to high-tech companies; A gets several job offers and takes the one from Microsoft, while B gets only one offer, from an India-based labor broker. A is paid at about 150 percent of B’s wages. Bear in mind that Uncle Sam gives the employers of both a tax break for hiring them as opposed to hiring an American for the same job, but within this convoluted system talent wins.

Stage Three: The H-1B Program, New Rules. Both men can make only a single application, each seeks to stay with the employer they have. B wins the lottery and stays in America; and A loses and goes back to India. Luck wins.

Stage Four: Layoffs. B’s firm lays him off, as a marginal talent, while A seeks an H-1B slot in a subsequent lottery and fails to win. Talent, or lack of it, more less prevails.

The fates of A and B might actually be different in real life, but this is a highly likely outcome that could only come with the new rules. If the H-1B were run as an auction, not a lottery, as the Trump administration toyed with late in its four years, with all the slots going to the employers with the best salary offers, we would not be discussing the subject.

Luck and Talent in the H-1B Hiring Process. The main reason that B got as far as he did, and that the more talented A never got hired in the H-1B program, is a new provision in the regs. No alien can submit more than one application to the lottery. Now that has the appearance of sounding fair — no alien gets more than one bite at the apple — but it totally ignores the question of the best use of the H-1B slot in question.

I am not terribly worried about the equity among a bunch of alien applicants, which seems to be the concern of DHS and some people on the Hill; I am concerned about the quality of the H-1B work force. If we are going to let someone into our labor market, may that person be one of real talent, and I suspect that the alien who can generate a dozen applications from U.S. employers is a better candidate for work here than one who can inspire only one or two applications.

The reader will have noticed that in the four stages of the extended H-1B decision-making in only one of them — the actual H-1B hiring process — does luck play any part in the game.

Let’s lay down some standards for what an H-1B program should look like if we actually have to have one, an open question as far as I am concerned.

An Ideal H-1B Program. The H-1B program should be stable, with the rules being pretty much the same over time. It also should have these characteristics as it should operate as a small-scale supplement to the use of citizen (and green card) workers when alien workers are actually needed:

  1. It should remain small, expanding only when really, really needed;
  2. It should be expensive to employers for the same reason; if they want to be excused from the American labor market they should pay substantial fees to the government;
  3. It should be used exclusively by real employers with there being no opportunity for profit-making by middlemen labor brokers, as my colleague John Miano has suggested; and
  4. It should be, above all, tilted toward quality of the work force, something that is lost when lotteries, rather than employer-offered wage levels, decide who is to come to this country.

One of the multiple failings of the new regulations is that they preserve the ridiculously low entry fee for the program, a non-returnable $10 (plus other, much higher fees if the employer wins the lottery). That non-refundable fee should be at least $1,000. Another is that while applicants can file only once, employers can seek many times the number of workers they can use, losing only the $10 for each application.

The contrast between the way excess filings are handled by the employer and the worker is remarkable when one remembers that this employer benefit is proposed by the so called pro-labor Biden administration.