ECONOMIC POLICY INSTITUTE’S BRIEFING PAPER BIASED

The Economic Policy Institute’s briefing paper written by Ron Hira, released last week, concludes that the practice of using H-1B and L-1 workers and then sending them back to their home countries is bad for the economy.
The report’s premise is that some employers use H-1B’s and L visas as a bridge to permanent residence, and some employers use those categories to transfer temporary workers. He divides the employers to good ones (who are U.S. corporations that bring H and L workers to the U.S., pay them adequate wage and sponsor them for permanent residency thereby transferring knowledge to U.S. workers) and the bad ones (generally foreign employers or U.S. employers with off-shore companies in India that bring these workers for temporary periods, exploit and underpay them and then send them back home after receiving U.S. training).
Hira called his statistic “immigration yield,” which is just a comparison of H and L visa usage versus the number of PERM applications filed by the highest users of those visas. His conclusion that because the highest users of H-1B’s and Ls are Indian consulting companies, and these companies have only a minimal number of PERMs certified, they are using H’s and L’s as cheap temporary labor.
This analysis is flawed for many reasons. For one, he cannot explain the high number PERM filings of one of the IT consulting companies that is headquartered in the U.S. Second, at least with the H-1B visa there is employee portability, so one firm not applying for PERM does not mean these employees are not sponsored for permanent residence by another employer. Also, the EB-3 and EB-2 immigrant visa numbers retrogression is severe for Indian nationals (EB-3 numbers are backlogged for all nationalities) — so maybe the Indian worker does not want to wait 20 years for a green card in the EB-3 category? Third, his implication that companies that don’t sponsor H’s and L’s for PERM are using these workers instead of more expensive American labor has no basis in reality. At least with the H-1B visas, the employer must pay at prevailing wage levels. No salary data (average or median) was used in this report at all to show what the actual pay is for those employees. Also, most L-1A managers/executives are exempt from the PERM process altogether. I could go on and on about this but choose not to…
The reality is that usage of H-1B and L visas varies depending on the needs of the employer, whether it be bringing these workers here for a permanent basis or rotating experienced professionals into the U.S. and send them abroad (back home or to a third country). According to the government’s fraud statistics (USCIS and DOL enforcement actions), the majority of employers who use H-1B workers pay these workers adequate wages and comply with all of the rules. Yes, there are abusers of the program, but these abusers are not the typical international corporations that rotate employees between different countries.
My recommendation to Hira is to actually do your complete research before publishing a biased briefing paper, but I suspect this was not his intention in the first place anyway…

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