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LABOR BASED IMMIGRATION:
THE H-VISA PROGRAM
AFL-CIOCornell Institute for Public Affairs
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
H-1B Visa
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Literature Review
Research Methodology
Research Questions and Associated Policy Recommendations
Conclusion/Summary Findings
Paper Sections/ Outline
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Literature ReviewApplication Process/Key Statutory Provisions
H-1B Visa Cap
Prevailing Wage
The Importance of STEM Industries/Professions
H-1B
Department of Labor
Department of
Homeland Security
Department of State
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Literature Review- Key Findings Pervasive uncertainty and controversy regarding
about the effects of the program upon the domestic labor market
Severe lack of accurate and complete micro-data
Most studies are descriptive in nature- data corruption and incompleteness prevents more detailed analyses
Weak enforcement efforts by agencies
Responsibility for administering the program is widely dispersed and fractured across agencies
Few formal information-sharing efforts across agencies.
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Research Methodology Primary and secondary sources
informed our analyses
Research limitations
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Research Questions1. Legislation
In the form of a legislative bill, what changes should be made to the H-1B visa program? In particular, does past legislation provide a roadmap for future legislative remedies?
2. Auction SystemWould an auction system successfully address the problems previously identified with the quota cap system? Would such a system improve the fairness of outcomes for workers and improve efficiency in the labor market?
3. Agency Data Systems/Reforms in Data Reporting and GatheringWould more detailed, accurate, and more easily available data improve the ability of policymakers to: (1) capture the size and characteristics of the H-1B worker population, (2) estimate the effects that the program has upon the domestic labor market (3)detect fraud and misconduct and (4) improve the program’s transparency? Should these reforms to data gathering and reporting systems include a central data clearinghouse that each agency could freely use?
H-1B
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Legislative Remedies H-1B
Overview of Analysis: 115 Proposed Legislative Bills 2007 and 2009 Durbin bills Common issues and controversies Likelihood of Immigration Reform
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Policy Recommendations - Legislative Remedies
Increase funding, investigative and enforcement powers of DOL
Tri-Department Clearinghouse Data System
Increased incentives and punitive measures
Eliminate loopholes
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Auction SystemsGeneral goals common across all proposed auction
systems include: (1)Improving labor mobility (2)Improving the leverage of workers to negotiate
with firms,(3)Creating price signals for policy makers to adjust
the number of visas issues each year (4)Increasing elasticity of labor supply and reducing
deadweight losses in the labor market (5)Accounting for worker heterogeneity even within
professions in a systematic way
H-1B
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Three distinct auction systems were considered:
(1) Employer based system by Orrenius and Zavodny
(2) Employee based system– employees own visas, visa prices are variable
(3) Employee based auction system- employees own visas, visa priced are fixed, employers bid on wages with prevailing wage by profession and region as the minimum required bid for each auction.
Auction Systems
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Employer-Based Auction System H-1B
Employer
Employer
EmployerEmployer
Employer
Employer
Employer
EmployerEmployer
Employer
SecondaryVisa
Market
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Common Operational Features of Each Auction SystemReal-time auction (Ebay
type) Dedicated auction sitePre-determined quantity cap
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Employer vs. Employee-based Auction systemsH-1B
• Expected Costs and expected benefits• Lack of data and points of comparison• Implementation
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Auction System- Policy Recommendations Keep the current visa cap system fundamentally in place but experiment on the margins once the existing cap is reached in the coming years by: Creating Pilot Programs (1)Employer-based(2)Employee-based Finance further research into the effects of each pilot Finance additional research of alternative auction
systems
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Agency Data System – Current Challenges
Major problems with current systems for collecting, organizing and reporting data include: (1) Lack of transparency (2) Lack of coordination(3) Incomplete, inaccurate, or absent data(4) Opportunity for fraudulent and dishonest practices
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Proposed Solution- Centralized Data System
Department of Labor
Department of
Homeland Security
Department of State
Tri-department Clearinghouse
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Centralized Data System-Policy Recommendations
H-1B
Department of Labor
Department of
Homeland Security
Department of State
Tri-department Clearinghouse
Create modest new annual reporting requirements that discentivize fraudulent or dishonest practices. These would also include a unique identifier for each worker and submitting W-2 information to the DOL on an annual basis.
Improve the capacity of agency officials to enforce labor standards through the creation of a more detailed record
Improve the capacity of stakeholders in the business community, labor organizations, government agencies, academia and elsewhere to analyze the program, the effect of the program’s outcomes.
Cornell UniversityCornell Institute for Public Affairs
American Federation of LaborCongress of Industrial Organizations
Conclusions/Summary of Findings
(1) The fragmented and severely incomplete data about the population of H-1B workers creates significant difficulties in trying to rigorously estimate the effect that the program has upon the wages, employment, productivity, and working conditions of both foreign and domestic workers.
(2) The authority to administer the H-1B program is heavily fragmented between the Department of Labor, the Department of Homeland Security, and the Department of State. In turn, this significantly limits the capacity of those agencies to detect, investigate, and deter fraudulent, dishonest, or abusive practices among participants of the H-1B program.
(3) The current visa cap system is an inefficient way of allocating H-1B visas that is largely unrelated to the demand for foreign workers at any given wage or skill level.
(4) Prevailing wages are a source of continuing controversy and have both direct and indirect impacts on all major efforts to reform aspects of the H-1B program.