Wednesday, August 11, 2010

The WTO GATS and H-1B Pundits Pandering in The Media

I've noticed an interesting phenomena lately, studies on skilled immigrants get quoted in other later studies until the the quoted material has largely a different meaning. 

Paraphrasing:  25% of new startup corporations had immigrant founders

The studies I've read on the immigrant founders appear to come from the same data, but the part left out is that the immigrant founder is generally one of five founders. From one of the early studies, I ran the numbers and found that when the four American founders are factored in, the likelihood of two immigrant founders in the same company would be low and that the performance of the immigrant founder reflected the immigrant population at large.

Some media and industry pundits have been quoting an NFAP study (Table 1) to infer that the H-1B visa is only .06% of the labor force and, from the omission of a footnote, infer that the numerical cap on H-1B visa has reverted to the 1998 levels of 65,000.  The 65,000 H-1B cap inference is far from the truth in the matter.

The “American Competiveness in the Twenty-First Century Act,” (AC21) created special carve-outs with unlimited cap exemptions for certain Nonprofit, University and Government entities. Additionally, the “H-1B Reform Act of 2004,” added 20,000 visas to the H-1B for postgraduates of U.S. Universities. Without the AC21exemptions and additional 20,000 visas for postgraduates, a 1998 temporary increase in H-1B numerical cap would have expired in 2002 subsequently, an average 43,441 per year (since 2005) nonimmigrants would have competed for visas within the numerical cap of 65,000.

Average Yearly H-1B Approvals since the H-1B Reform Act of 2004 (2005 – 2009)

Avg. Initial Employment Approvals (2005 – 2009) = 108,441
Avg. Continuing Employment Approvals (2005 – 2009) = 153,504

Note: AC21 also provided additional single year extensions for PERM dual-intent applicants; this is why H-1B continuing employment approvals consistently exceed initial employment approvals since FY 2003 – effectively extending the H-1B and L-1 temporary visas from 5 to 7 years, into the decade timeframe.

Very creative taglines tend to be sensationalized in the zeal to increase the foreign worker quotas during this recession, from the NFAP study, “With the annual flow of H-1Bs representing only 0.06 percent of the U.S. labor force in 2009, arguments that H-1B professionals overwhelm the American workforce are not supported by logic or the facts.” Beyond the data-banding use of only a portion of the H-1B caps, quoting the statement misleads the casual reader, ignoring the fact that the H-1B is a six year duration visa and implying that all occupations in the Labor force are open to the H-1B program. Looking at the H-1B in terms of the entire Labor Force is quite slanted. The Computer related occupations data displays the misuse and subsequent cause for resentment of the H-1B program.

(IT) Computer Related Occupations:

Growth in Employment (IT) Levels (2005-09) = 382,640 (12% emp. growth)
H-1B initial (IT) employment approvals (2005-09) = 258,870 (67.7% of emp. growth)
(Source: USCIS, H-1B Characteristics Series)

(IT) Assoc. thru PhD Degrees Conferred (2004-08) = 529,798 (138% of emp. growth)
(Excludes temporary residents -- citizen and perm resident degrees conferred only)
(Source: NCES, IPEDS Completions Survey)

From the growth statistics listed above, we can see that the U.S. is being far too generous with the employment opportunities granted to citizens of Least Developed Countries (LDC). It is not by accident that the highest percentages of H-1B and L-1 nonimmigrants come from LDC regions, LDC have preferential negotiating privileges in the GATS arena. Global Trade in Services, as a form of Direct Foreign Aid may be a noble cause, but the U.S. cannot afford to be so generous as to bankrupt its citizens.

The next section explores areas where U.S. immigration policy exceeds negotiated trade commitments.

General Agreement in Trade and Services (GATS)

H-1B (Fashion Models and Specialty Occupations) and L-1 (Intra-corporate) visas are specifically named and committed in General Agreement in Trade and Services (GATS) trade commitments. Eliminating the H-1B and L-1 visa programs would be next to impossible. However, under GATS, the terms of these visas are considerably different from the terms in U.S. law.

 Under GATS: there are no dual-intent citizenship provisions for H-1B, or L-1 visa, this is considered “poaching” and is detrimental to Least Developed Countries

 Under (AC21) U.S. Law: The H-1B and L-1 visa durations may be extended into the decade timeframe: ”The Attorney General shall extend the stay of an alien who qualifies for an exemption under subsection (a) in one-year increments until such time as a final decision is made on the alien’s lawful permanent residence.”

 Under GATS, the H-1B is a three year visa with a 65,000 per year worldwide limitation.

 There is no GATS requirement or provision for extension of the H-1B beyond 3 years.

 Under GATS, the L-1 visa is allowed a single 2 year extension; under U.S. law the L-1A can be granted two 2 year extensions after the initial 3 year period.

 Under GATS, the no-layoff provisions are 6 month preceding and 90 days following a nonimmigrant employment application. Under US Law the layoff restrictions are 90 days – 90 days, but the 90/90 rule is only applicable for H-1B Dependent Employers.

Over a six year period (2004-09), Americans assumed about 101,000 of 600,000 new jobs in Computer related occupations (IT). for a matching period (2003-08) about 110,000 postgraduate IT degrees were awarded to American citizens and permanent residents.  This indicates that only Americans with postgraduate degrees are being hired and that the minimum educational level for H-1B in IT occupations should be raised to the postgraduate level.  Moreover, 2006 NSF data indicates that 31,000 of the 57,000 new H-1B awarded in IT had undergraduate degrees.

US GATS Commitment

d) the employer has not laid off or otherwise displaced workers in the subject occupation in the previous six months and will not lay off or displace any US worker during the 90-day period following the filing of an application or the 90-day periods preceding and following the filing of any visa petition supported by the application; e) the employer has taken and is taking timely and significant steps to recruit and retain sufficient US workers in the specialty occupation; and f) notice is given at the time of application by the employer to employees or their representatives at the place of employment.

US 20 CFR 655.738

(c) Direct displacement. An H-1B-dependent or willful-violator employer (as described in §655.736) is prohibited from displacing a U.S. worker in its own workforce (i.e., a U.S. worker "employed by the employer") within the period beginning 90 days before and ending 90 days after the filing date of an H-1B petition supported by an LCA described in §655.736(g). The following standards and guidance apply under the direct displacement prohibition:

I'm just saying, a lot of times what's written and what the truth is are sometimes a bit misleading.



H - 1 B V I S A S B Y T H E N U M B E R S: 2 0 1 0 A N D B E Y O N D

GATS Conditions to Achieve Developing Country Objectives


GATS DATABASE of Commitments (Commitments have changed since initial offer)


‘‘(5) The numerical limitations contained in paragraph (1)(A) shall not apply to any nonimmigrant alien issued a visa or otherwise provided status under section 101(a)(15)(H)(i)(b) who is employed (or has received an offer of employment) at— ‘‘(A) an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))), or a related or affiliated nonprofit entity; or ‘‘(B) a nonprofit research organization or a governmental research organization.

H-1B Dependent Employer

Displacement of US worker obligation for H-1B dependent and Willful Violators

Allocation of Additional H-1B Visas Created by the H-1B Visa Reform Act of 2004 [70 FR 23775] [FR 19-05]

Immigrant Intent and the Dual Intent Doctrine
Written by Henry J. Chang

Appendix 1
Current subsection of GATS US Commitments concerning L-1 and H-1B visa

All Sectors: Temporary Entry And Stay of Natural Persons1

4) Unbound, except for measures concerning temporary entry and stay of nationals of another member who fall into the categories listed below:

4) Unbound

Services Salespersons - persons not based in the territory of the United States and receiving no remuneration from a source located within the United States, who are engaged in activities related to representing a services supplier for the purpose of negotiating for the sale of the services of that supplier where: a) such sales are not directly made to the general public and b) the salesperson is not engaged in supplying the service. Entry for persons named in this section is limited to a ninety-day period.

Intra-corporate Transferees - managers, executives and specialists, as defined below, who are employees of firms that provide services within the United States through a branch, subsidiary, or affiliate established in the United States and who have been in the prior employ of their firm outside the United States for a period of not less than one year immediately preceding the date of their application for admission and who are one of the following:

a) Managers - persons within an organization who primarily direct the organization, or a department or sub-division of the organization, supervise and control the work of other supervisory, professional or managerial employees, have the authority to hire and fire or recommend hiring, firing, or other personnel actions (such as promotion or leave authorization), and exercise discretionary authority over day-to-day operations. Does not include first-line supervisors, unless the employees supervised are professionals, nor does it include employees who primarily perform tasks necessary for the provision of the service.

b) Executives - persons within the organization who primarily direct the management of the organization, establish the goals and policies of the organization, exercise wide latitude in decision-making, and receive only general supervision or direction from higher-level executives, the board of directors, or stockholders of the business. Executives would not directly perform tasks related to the actual provision of a service or services of the organization.

c) Specialists - persons within an organization who possess knowledge at an advanced level of continued expertise and who possess proprietary knowledge of the organization's services, research equipment, techniques, or management. (Specialists may include, but are not limited to, members of licenced professions.)

Entry for persons named in this section is limited to a three-year period that may be extended for up to two additional years for a total term not to exceed five years.

Personnel Engaged in Establishment - A person who has been employed in the immediately preceding year by an entity described in Section II, receiving remuneration from that source, who occupies a managerial or executive position with that entity and is entering the territory of the United States for the purpose of establishing an entity described in Section II that will support employment of persons named in paragraphs a), b), and c) therein. The subject persons shall present proof of acquisition of physical premises for the entity that shall commence its business operations within one year of the date of entry of that person.

Fashion Models and Specialty Occupations - Up to 65,000 persons annually on a world-wide basis in occupations as set out in 8 USC. ' 1101 (a) (15) (H) (i) (b), consisting of (i) fashion models who are of distinguished merit and ability; and (ii) persons engaged in a specialty occupation, requiring (a) theoretical and practical application of a body of highly specialized knowledge; and (b) attainment of a bachelor's or higher degree in the specialty (or its equivalent) as a minimum for entry into the occupation in the United States. Persons seeking admission under (ii) above shall possess the following qualifications: (a) full licensure in a US state to practice in the occupation, if such licensure is required to practice in the occupation in that state; and (b) completion of the required degree, or experience in the specialty equivalent to the completion of the required degree and recognition of expertise in the specialty through progressively responsible positions relating to the specialty. Entry for persons named in this section is limited to three years.

Specialty occupation aliens and their employers must be in compliance with all labour condition application requirements that are attested to by the established employer. These requirements are: a) wages paid to the person are the greater of: 1) the actual wage paid by the employer to individuals in that place of employment with similar qualifications and experience, or 2) the prevailing wage for that occupational classification in the area of employment; b) conditions of work are such that they will not adversely affect working conditions for those similarly employed; c) there is no strike or lockout in the course of a labour/management dispute in progress at the place of employment affecting the subject occupation; labour/management dispute in progress at the place of employment;

d) the employer has not laid off or otherwise displaced workers in the subject occupation in the previous six months and will not lay off or displace any US worker during the 90-day period following the filing of an application or the 90-day periods preceding and following the filing of any visa petition supported by the application; e) the employer has taken and is taking timely and significant steps to recruit and retain sufficient US workers in the specialty occupation; and f) notice is given at the time of application by the employer to employees or their representatives at the place of employment.

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