The year's supply of H-1B visas for inexpensive high-tech workers was exhausted the first week that the window was opened — to no one's surprise. Every year the visas become available to employers on April 1 — 65,000 in the general category and 20,000 in the advanced-degree-in-the-U.S. category.
Bargain-hunting employers, particularly the Indian body shops (i.e. placement agencies), poured in their applications, hoping to obtain nearly indentured college graduates on the cheap, most of whom will be assigned to routine technological jobs.
This was clearly predictable, given the lust of these employers for members of this work force, most of whom are young, docile, and newly trained. The workers are largely drawn from two traditional societies, India and China, where bosses are seldom, if ever, challenged. It is so much easier for a manager to direct these workers than older (i.e 35-plus) American workers who might have some ideas of their own, and the alien workers are also much less expensive.
Employers also may have rushed to file applications to support the industry's lobbyists who say — despite abundant evidence to the contrary — that there is a shortage of people to do this work. If the applications had lagged, it certainly would have undercut the lobbyists' arguments.
That said, I was interested in how USCIS has decided to handle the fact that they have more applications in hand than slots available, something that should have been predicted months ago. There are four possible ways to approach the situation:
- The Traditional Way: First Come-First Served;
- The Capitalistic Way: Higher Salaries Get the Workers;
- The Taxpayers' Way: Auction of Scarce Slots; and
- The USCIS Way: Lottery
Needless to say, USCIS took the last way, one that will create no public benefits, and will be the least inconvenient to the agency, and, equally important, will not cause any additional costs to the high-tech employers who are, apparently, of high importance to the agency leadership.
Let's look at the four alternative approaches.
1. The Traditional Way. An April 5 USCIS press release announced that it would conduct a lottery to allocate the H-1B visas, but did not explain why this was necessary. Why did not the agency simply time-stamp all arriving applications and then determine when the 65,000th one arrived, and refuse to process all others?
My suspicion is that handling of 65,000 petitions of one type, as well as the management of 20,000 cases that were slightly different, all arriving in a great rush, might have been too much for the agency's logistical capabilities.
Was JPMorgan, the vast financial giant that opens envelopes and sorts mail for USCIS, not up to the task? If so, we will never be told.
2. The Capitalistic Way. What the government might do in the case of a tie — and this would require changing the regulations if not the underlying law — would be to simply allocate the visas to the employer paying the highest wages. This is how the market works, generally — if there are too few people willing to be a supermarket cashier at $10 an hour, then the grocery stores that pay $11 an hour will fill its job slots and their less generous rivals will not.
Such an approach would directly benefit the foreign workers hired under the program, and it would, indirectly, help citizen workers because the whole allocation system would make the H-1B program more expensive and would encourage employers to think about hiring U.S. workers.
What's wrong with that? The answer is, of course, that employers would not like it, and their lobbyists would oppose it.
3. The Taxpayers' Way. If there is a government-created good in short supply, such as an H-1B visa or a radio station frequency, why not sell it to the highest bidder, and use the money to pay down the national debt?
In this case, to generate enough funds to pay for the process and guarantee some help to the Treasury, there could be a modest minimum price of, say, $1,000, and if there are 85,000 petitions at stake, the minimum take from such an auction would be $85 million; at $2,000 each it would be $170 million. I like that idea, but, of course, employers and their lobbyists are more important than taxpayers, so it will not happen.
Such an arrangement, like alternative No. 2, would tend to run up the cost of the program and would encourage employers to be more amenable to hiring citizens and green card workers.
4. The USCIS Way. The agency will be running a two-stage lottery. First it will establish who will get the 20,000 slots for those with U.S. advanced degrees (typically two-year master's degrees), then it will stir in the advanced-degree applications that did not make it into the 65,000 pool, and run another lottery.
No extra fees will be charged for this extra service and the wages paid through the program will not be improved — two negatives that are cheering to the exploitative employers whose opinions count.
Meanwhile, industry lobbyists will point to the reasonably quick filling of the ceilings as proof positive that the United States has a high-tech skills shortage.
The same lobbyists, however, presumably are chagrined that the year's set of H-1B visas were not gobbled up in a single day, as has happened in the past. It would have made their story that much more dramatic.