US: Going after the skills of foreign workers

In a couple of weeks, technology companies across the country will engage in an annual ritual that has become increasingly urgent: applying for temporary visas, known as H1-Bs, to bring in workers for jobs that supposedly cannot be filled by domestic workers.

Last year, the cap of 65,000 visas was reached in a single day, with so many applicants that the government had to resort to a lottery. The H1-B program is intended to address a significant need — that is, to counteract a shortage of skilled workers — but loopholes and a lack of oversight have led to practices that run counter to the program’s intent. The cap on H1-B workers probably should be raised, but it is impossible to say how many visas should be granted until the program undergoes significant reform.

Four years ago, the Office of Management and Budget found the program “vulnerable to fraud or abuse” and made several suggestions for reform, none of which has been implemented.

In most cases, the H1-B program does not require that employers hire a U.S. worker who may want a particular job, and a U.S. worker can be displaced from a job in favor of a foreign worker, according to the Department of Labor. In fact, contrary to widely held belief, most employers using the H1-B program do not have to search at all for a U.S. worker willing to fill a job.

Of the 10 companies that filed the most requests for H1-B visas in 2006, seven had headquarters in India. Those companies use H1-B visas mainly to send workers to the United States for training before bringing them back to work in low-wage countries.

Oversight has been less than rigorous. The Department of Labor certified 99.5 percent of the nearly 1 million applications that it reviewed from 2002 to 2005. A check of the same applications by the Government Accountability Office found thousands of instances where the wage rates being paid to H1-B workers fell significantly below the prevailing wage, a violation of the rules. And that GAO review merely looked at the information provided by the employers themselves, without verifying the information’s accuracy. In fact, the H1-B program does not require any verification of the information presented by employers. Many of the workers brought in under the program actually earn less than the median U.S. income.

How can authorities determine which foreign workers are most needed? Let the market decide: The government should auction off the visas.

Companies would be willing to bid up to the difference between the cost of finding a domestic worker and the lesser amount they would pay a foreign worker. Where that difference is greatest would, in essence, be the greatest need. To help even the playing field, small businesses could receive discounts that would be applied to their bids. Proceeds from the auction could go toward training and education for U.S. workers displaced by foreign labor.

It may not be a fool-proof system. But it’s a lot better than the one in place today. (The Star Tribune)

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