Friday, March 20, 2015

The Great Employment Giveaway

Since 2000, USCIS starts the fiscal year by giving away about 1 million work-years, in advance, to skilled non-immigrant foreign workers. In the chart below, we see the actual visas granted by year; however, most of these visas do not expire yearly, the H-1B has a six year expiration, the L-1 intracompany-visa a 5 year for worker, or 7 year expiration for manager. The O-1, and TN visas are one year duration and can be extended indefinitely.


In the following chart, we see the same visas as above, combined as a group, with their expiration duration extrapolated. The work-years consistently remain at or above 1 million since the year 2000.



Generally, the skilled visas in question require a bachelors degree or equivalent, the following chart displays the yearly growth in employment levels for bachelors degrees and above, available from the BLS only in the 25 years and above age-group.  When comparing the chart above with the employment growth chart below, we see that from 2001 to 2014, has employment growth exceeded the linear of about 1 million new jobs only 6 times in those 14 years.

In 2008, employment levels for college graduates declined by 106,000.  During that same year 1.46 million non-immigrants were hired, thus, incumbent workers lost 1.56 million jobs.  In fact from 2007, to 2011, untold numbers of US workers and possibly temporary foreign workers lost million of jobs, due to the incessant importation of temporary worker.  Even though employment was growing, the flood of foreign workers made it impossible for separated workers to rejoin the workforce for several years.


  
This brings us to the data that started me wondering if there is a correlation to the addition of educated workers with worsening employment opportunities.  The chart below compares the percent of bachelor degree'd and above (again age 25 and older) with the percentage of bachelor degree'd and above within the entire civilian population.  In this data, there is no distinction between citizen workers and immigrants, but we see that around the year 2000, temporary foreign workers began to increase, while the opportunities for college graduates decreased.  Note that this is many years prior to the great recession.



Data sources:

BLS CPS
http://www.bls.gov/data/

Nonimmigrant Visas by Individual Class of Admission (e.g. A1, A2, etc.)*
http://travel.state.gov/content/visas/english/law-and-policy/statistics/non-immigrant-visas.html

Wednesday, February 25, 2015

Comparison: "Inequality for All"

No, I haven't seen Reich's, Inequality for All, but I did notice a similarity between his "suspension bridge" graph and the Census data for the foreign-born in the labor force, covering roughly the same period.

It appears to this layman, that income inequality peaked during the era of the robber-baron, i.e., the Great Depression and then again at the onset of the Great Recession, where the foreign-born in the labor force was in excess of 15% on both occasions.

Perhaps, the learned economists can explain why an inorganic labor supply, comprised of immigrants, does not upset the labor and wage economic-equilibrium, thereby causing the income inequality gap.

 

By percent, the lowest level of foreign-born in the labor force was in 1970 at 5.2%. This correlates with the chart provided below "Wages as Percent of GDP"  (Gross Domestic Product).

Wages as Percent of GDP
(as mass-immigration resumes in 1970, wage share declines)





Here is the teaser for the film, if you are interested...



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Friday, November 21, 2014

OPT extension to cost current STEM workers 175.5 billion in earnings

Updated: November 21, 2014

American Tech Workers Successfully Win Standing to Sue on Alleged Illegal Issuance of STEM-Related Work Authorization

Source: Link

American workers at a huge hiring disadvantage.
* Judge recognizes that OPT foreign-workers are Social Security and Medicare exempt.

The Programmers Guild and the Immigration Reform Law Institute, have been denied a preliminary injunction against the Bush administration's 17 month extension of OPT-CPT training visas for foreign graduates studying STEM coursework.

Catch up on the details here:
Judge rejects student visa injunction sought by H-1B opponents
Patrick Thibodeau: Computerworld, August 7, 2008

Here's the problem:

"Hochberg's ruling focused less on the merits of the case and more on whether H-1B opponents had legal standing to bring it, noting that they could not show they had been directly hurt by the student visa extension."

One way to demonstrate direct harm to current STEM workers would be to show the effect of the added temporary foreign workers impacting the lifespan of the STEM career.

BLS STEM Employment 2005 = 5,228,040
Avg STEM Salary 2005 = $64,560.00

U.S. citizens and permanent residents:
Bachelors Degrees Science and Engineering (S&E) awarded

1995 = 363,463
1996 = 369,927
1997 = 373,745
1998 = 375,909
1999 = missing
2000 = 383,438
2001 = 384,492
2002 = 399,288
2003 = 421,730
2004 = 436,372

Total = 3,508,364
(389,818.22 avg. per yr.)

STEM Career to replacement factor (domestic) = 13.41 years
(2005 STEM employment divided by avg. S&E (citizen and perm res.) bachelor degree production.)

Assumptions:
* Domestic bachelor's degree production will increase naturally and congruent with demand.
* Bachelor's degrees are not the minimal educational requirement for all STEM occupations, but it would only take 13.41 years of bachelor degree production to replace the entire STEM workforce.
* S&E degrees are not the only degrees relevant to STEM occupations.

Baseline:
Without additional foreign labor supply, the average US, S&E undergraduate could expect a STEM career lifespan of 13.41 years, before being replaced by a domestic candidate with an updated degree. 

Source data: Institute of International Education

Nonresident aliens:
Bachelors Science and Engineering 
(S&E) awarded
1995 = 14,685
1996 = 14,747
1997 = 14,737
1998 = 14,709
1999 = missing
2000 = 15184
2001 = 15,714
2002 = 16,323
2003 = 17,704
2004 = 18,606

Total 142,409
(15,823.22 avg per yr.)

STEM Career to replacement factor (domestic & foreign grads) = 12.89 years
(2005 STEM employment divided by avg. S&E (citizen and perm res. plus nonresident alien) bachelor degree production.)

Lost career lifespan caused by retaining foreign S&E graduates via temp. visas = 0.52 years

Dollar impact to each current STEM worker = $33,571.20

Effect:
The effect of modifying immigration policy, with intent to retain all foreign S&E graduates in the tax subsidized OPT visa (Social Security and Medicare exempt), combined with the H-1B visa, which includes unlimited extensions (beyond the 6 year limitation) for Permanent Residency applicants,  is extremely detrimental to the competitiveness of the citizen and permanent residents.

Extending the OPT visa an additional 17 months, with CPT provisions for STEM students, ensures that a higher percentage of foreign-students will fall into the temporary-worker loophole, and that foreign-students will enjoy a hiring preference while transitioning from working-student status, to H-1B.    

Total lost earnings to citizen and perm res. STEM workforce = $175,511,576,448.00
(Employed STEM earnings lost in career lifespan, shortened by .52 years)

Source:
STEM Bachelor degree data
http://www.nsf.gov/statistics/nsf07308/tables/tab4.xls

STEM Employment data
http://www.bls.gov/opub/ooq/2007/spring/art04.pdf

Details on OPT - CPT status
http://www.ice.gov/sevis/practical-training

Source data for chart:
Institute of International Education

Sunday, July 27, 2014

Common Sense H-1B Reform

Over the last couple of years, the trend in the media has been to lament that we train foreign students in "advanced" STEM degrees here, and then send them home to compete against us, due to a shortage of H-1B visas. The fact that H-1B pundits are careful to use the word "advanced" instead of postgraduate has not escaped me.  In addition to the H-1B educational requirement being set too low, another source of H-1B lobbyist whining is the highly publicized H-1B lottery, which is likely caused by foreign outsourcing firms who suffer no financial penalty when attempting to game the system.

Adjust the H-1B educational eligibility requirement, not the yearly cap.


The logical thing to do is to raise the educational requirement for H-1B to a postgraduate degree.  According to the FY 2012, H-1B data, eliminating bachelors degree eligibility would free up 50% of new H-1B visas.

Data presented by Dr. Ron Hira, shows that legitimate US employers draw heavily from the postgraduate population, while offshore outsourcing firms favor undergraduate degrees.  Additionally, the offshore outsourcing firms have the unlimited Intra-company L-1 visa available to them, once the candidate has one year of experience with the firm.

By raising the H-1B educational requirement, citizen and permanent resident candidates would have a better chance at bachelors degree and associate degree level positions, which are the targeted positions to be moved offshore by the offshore outsourcing firms.  Restated, 50% more H-1B visas would be available to legitimate US employers.

According to the Institute of International Education, there were 311,204 foreign students enrolled in postgraduate programs in the United States in 2012-13.  This might seem like a large number until we factor in the Doctoral programs are four years, and masters and professional degree probably average two years. So the number likely to graduate in 2013 was roughly 126,157 for all declared and undeclared majors (not just STEM). Additionally, some students may not want to stay in the US and other might not graduate, but the 126,157 number is still less than the total number of H-1B initial employment approvals in FY 2012 (136,890),  

Work experience authorizations 


The IIE data also discloses that there were 94,919 international students gaining work experience on the Optional Practical Training (OPT), an unlimited cap, 12 month work permit with a 17 month extension available for STEM graduates.  While working on student visas, these employees are exempt from Social Security and Medicare tax, putting entry level citizens and permanent residents at a huge financial  disadvantage.

H-1B lottery and oversubscription


A second point of contention is the H-1B lottery, that is triggered when the number of applications exceed the 85,000 visa cap.  As reported by the Center for Immigration Studies, this phenomena is primarily caused by companies attempting to game the system.  Due to the fact that H-1B application fees are refunded to the applicant employer (unlike most other visa fees) there is no financial penalty for oversubscribing the H-1B category.

Gaming the number of applications


H-1B dependent employers, employers with a high percentage of H-1B staff, are eligible for something called a multi-slot  Labor Condition Application (LCA).  The multi-slot LCA allows, primarily outsourcing, firms to apply for an unlimited amount of H-1B visa on a single application -- without naming the candidate or providing credential for USCIS/DOL review.

The ability to apply for hundreds of H-1B visas, on a single application, with the knowledge that application fees will be refunded encourages these companies to oversubscribe the visa category, hoping that their consultant (possibly the same candidate) will be placed at the firms who could not attain the visa at a higher premium.  (I.e., if Microsoft doesn't win the lottery on a single LCA, the outsourcing firm, with the un-named H-1B LCAs, can provide the candidate as a consultant.)

Employment based (EB-3) permanent immigration oversubscription


Due to the dual-intent rules available in both the H-1B and L-1 temporary visas, employers can sponsor these employees for permanent residence.  Published figures estimate that there is a backlog of 500,000 workers in the EB-3 (bachelors degree level) employment based permanent residency program.  Due to country of origin limits, these immigrants are primarily from China and India and are on yearly AC21 extensions, taking them well beyond the 5 and 6 year limits of the L-1 and H-1B visas.

As such, bachelor degree permanent residency applicants from non-backlogged countries will gain permanent residency ahead of those on AC21 extension.  Raising the educational requirement for H-1B will reduce the intake of bachelors degree permanent residency applicants and vacant slots can be recovered and distributed to address the AC21 backlog.