Do Workers Hired on the H-1B Visa Displace US Workers?

OUTSOURCE2When looking specifically at the H-1B visa, there have been many news stories over the last two years – some claiming that the H-1B is primarily used to displace US workers (especially in the IT area), and that it is used to artificially keep wages lower.  Others claim the exact opposite, that the H-1B compliments US workers, and does not depress wages (and may even help expand the number of jobs available to US workers).  So who is right?  What is accurate?

While not an easy question, the evidence clearly shows that, in most cases, the H-1B is not used to displace US workers.  A study by the Kellogg School of Management at Northwestern University looked at this issue and found that, in the majority of cases, H-1B workers are taking jobs that US workers do NOT want.  In addition, because of the increased costs associated with getting an H-1B visa, most employers only use the H-1B route when they are unable to find US workers to fill the jobs.  However, there are a subset of H-1Bs that are harder to explain.  Specifically companies such as Walt Disney, etc. who have outsourced their IT work to companies that primarily hire H-1B workers and, in general, pay them less than US Workers would make working at these companies directly.

While we certainly cannot dispute that this is happening, I think the flaw in the argument that this is displacing US workers is that these companies could have just as easily outsourced these jobs overseas, so no one in the US is getting these jobs, and no US taxes are being paid.  Would that be a better outcome?  Is it really the H-1B that is displacing the US workers, or is it the desire of these companies to pay as little as possible?  I can guarantee that Disney is NOT hiring new IT workers in droves and is mostly outsourcing those jobs overseas at this time.

An article in “Daily Caller” discusses this and talks with industry experts.  Basically, those companies in the US who hire H-1B tech workers are NOT the end source of outsourcing. Usually they are hired and brought in as an intermediary step – have those companies take over parts of the IT business, then send it ALL overseas.  In fact, most experts agree that if you got rid of the H-1B program today, that would not slow down or affect outsourcing overseas.  For most companies, the push to outsource is to stop doing things in-house that have nothing to do with the core competency of the company.  If they company is producing media, do you really need to hire people to maintain your website in-house?  Most companies answer that as a no – and outsource to save time and money.

As can be seen above, the H-1B visa program mostly helps US companies fill jobs that would otherwise remain unfilled.  It does not displace US workers, nor does it depress wages.  While those issues do exist, it is because companies are outsourcing overseas, not because they are outsourcing using the H-1B visa program.  In fact, the increased visa scrutiny, according to this article, is actually leading MORE companies to outsource overseas, not less.  Hopefully Congress and the current administration will see this and act accordingly.

Please remember, as always, this blog does not offer legal advice. If you need legal advice, consult with a lawyer instead of a blog. Thank you.

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