Is the H-1B visa taking away American Jobs?

Is the H1b Visa taking away jobs from Americans? If the H1B visa is for specialized skill workers, then why are they sometimes called low-wage workers? What role do corporates play in all of this? So, is the H1B visa actually beneficial to the US? That’s what we’re going to discuss today. But is the answer so black and white? 

If you’re an Immigrant or someone on a visa here, you might be tempted to say no. On the other hand, if you’re an American citizen who has at some point been laid off or found it difficult to land a job, you may be tempted to say yes. 

And that’s the most wonderful part of this question. The answer changes depending on who you’re asking. And the way the world is right now, if you try to find news sources and “research” to support your argument, you will find plenty of research favoring your point of view, leading to confirmation bias. 

So let’s try to understand both the points of view, and then maybe, hopefully, we’ll be able to decide. 

Let’s first understand the arguments of people against the H1B visa

H-1B visas displace American workers:

Some critics argue that H-1B visas are used by companies to replace American workers with cheaper foreign labor. This leads to lower wages and fewer opportunities for American workers.

Analysis

It has happened. This is a valid concern, as there have been cases where companies have been accused of doing just this. For example, in 2013, Disney was accused of laying off hundreds of American workers and replacing them with H1B visa holders. Not just that, Disney also made the workers who were laid off give a knowledge transfer to those who were going to replace them. And the workers were shocked when they realized that their replacements were going to be paid half of what they were making. Later on, their CEO even acknowledged that asking the laid-off workers to train people replacing them was a bit too much and apologized for it. 

But the damage was done. 

H-1B visas can lead to lower wages for American workers:

Even if H-1B visas do not lead to direct displacement, they can still lead to lower wages for American workers. This is because H-1B workers are often willing to work for lower wages than American workers. This can drive down wages for all workers in the same field.

Second argument: A study by the National Foundation for American Policy found that H-1B visa holders are more likely to be paid less than American workers with similar qualifications.

Another study by the Economic Policy Institute found that H-1B visas can lead to lower wages for all workers in the same field

Why does that happen? We’ll discuss that in a bit. 

H-1B visas can be abused by companies

Now, let’s move over to the other side and explore the arguments in favor of the H1B visa. 

1. There is an actual shortage of specialized skills in the US

Analysis: Is there a shortage of specialized skills in the US?

Well, A study by the Brookings Institution found that H-1B visas help to fill a shortage of skilled workers in the United States.

2. It allows the country to remain competitive and leads to innovation by hiring the most sought-after skilled workers from the entire world. 

Analysis: 

A study by the Partnership for a New American Economy found that H-1B visas help to boost the U.S. economy by creating jobs and attracting investment.

A study by the National Foundation for American Policy found that H-1B visa holders are more likely to start their own businesses than American workers.

3. Companies won’t spend thousands of dollars on each employee to sponsor their H1B if the talent is easily available within the US

Analysis: 

I’d like to believe it is true. Because companies spend a lot of money and time hiring and retaining H1B employees. I would like to believe that it’s true because a company spends somewhere around $2000-$6000 to just hire someone on an H1B visa. And I’m not even thinking about the time it takes to do that.

However, some may want to argue that companies are potentially saving a lot because they’re hiring that H1b employee for a lot less pay, and it’s tough to argue that because it does happen in certain companies. 

I also want to present another argument. Those coming here on H1B visas on certain “low wage’ jobs that do not require special skills don’t really know that they’re being paid less money than their American counterparts. We need to understand that for immigrants, they are coming to do a job that Americans aren’t able to do it themselves. So, should we really blame them?

Regardless, now after understanding both sides of the argument with some credible sources, we still don’t have a clear winner. 

But guys, we need a villain. If common people and their beliefs are not villains, then there should be someone else that we can put all the blame on, right?

Ok, I’ll present you guys with a villain. It’s the companies. 

Aren’t companies hiring people on H1B visas? Aren’t they the ones lobbying to keep things the same? Aren't they the ones laying off American citizens and asking them to train people on H1B before they leave?  Yes, we finally found the villain. But, have we? Really?

Yes, we can just blame the companies and corporations for finding loopholes in the law to hire people on H1B for cheap labor for their own profit. 

And a lot of it is right. If we were living in an ideal world. 

But we aren’t living in an ideal world. So, here’s my pitch in favor of the companies. Let’s take a step back and evaluate our own behavior.

Most of us prefer to save money by buying cheaper alternatives, as long as they get the job done in general. However, we expect companies not to do the same. American companies outsourcing jobs or hiring cheaper H1Bs or contacting H1B body shops to reduce their costs, is seen as abuse ?? How are we any different from them?

What’s seen as abuse by someone is seen as an opportunity by someone else to move forward in life. The Indian outsourcing firms fall into the ‘opportunity’ category. While they are likely abusing, they are moving forward, and are still doing it legally. And yes, all these H1B applications are processed and approved by USCIS (huge processing fees) - H1Bs do not cross borders illegally.

An open market is driven by simple economics. Cheaper is always good, whether it’s goods or services.

So, what’s the solution?

An Immigration reform. 

Immigration laws are outdated in this country. And the country is so divided that it would only take a miracle to get that done. 

But we can be hopeful. 

I’ll leave you with a fun fact: People who came here on H1B visas a while back and have managed to get a Green Card or citizenship sometimes complain that H1B visas are taking over American jobs. 

It’s a circle, you guys. 

That’s it for today. I really hope you enjoyed this blog post. We thoroughly enjoyed researching and creating this one. And if things aren’t going well, Remember It’s Ok, Yaar.