LABOR BASED IMMIGRATION: THE H-VISA PROGRAM AFL-CIO Cornell Institute for Public Affairs

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations H-1B Visa

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Literature Review Research Methodology Research Questions and Associated Policy Recommendations Conclusion/Summary Findings Paper Sections/ Outline

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Literature Review Application 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Research Methodology Primary and secondary sources informed our analyses Research limitations

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Research Questions 1. 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 System Would 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 Gathering Would 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Auction Systems General 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Employer-Based Auction System H-1B Employer Secondary Visa Market Secondary Visa Market

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Common Operational Features of Each Auction System Real-time auction (Ebay type) Dedicated auction site Pre-determined quantity cap

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Employer vs. Employee-based Auction systems H-1B Expected Costs and expected benefits Lack of data and points of comparison Implementation

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress of Industrial Organizations Proposed Solution- Centralized Data System Department of Labor Department of Homeland Security Department of State Tri-department Clearinghouse

Cornell University Cornell Institute for Public Affairs American Federation of Labor Congress 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 University Cornell Institute for Public Affairs American Federation of Labor Congress 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.