The Debate on Hiring Foreign Workers

Presidential candidates in this election season are debating the hiring of foreign workers by U.S. firms. The use of H1-B visas by companies is one major point of contention in this discussion.

Employers apply for H1-B visas so they can temporarily hire foreign workers in specialty occupations. Workers on this visa come to the U.S. specifically to work for the company that applied for the visa. They are required to return to their home country or renew their visa if laid off by the sponsoring company. An H1-B is granted for three years.  A maximum of 65,000 visas can be issued each year.

For employers, obtaining an H-1B can be labor intensive, frustrating, and costly. Petitions cost upward of $1,000 and are chosen by a lottery. Even the chosen applications can be denied in the end due to a clerical error or delayed for months. The red tape also gives larger firms an advantage over smaller ones that cannot afford to complete the paperwork or to take the risk of hoping the process will land them a key employee.

These visas are most often used by employers who need high tech workers, especially computer programmers. A National Center for Educational Statistics report stated that in 2012 the influx of computer programmers on the H1-B program filled 7,000 jobs that could have been occupied by U.S. graduates in the field.  

Well-known companies Disney World and Southern California Edison made headlines by having their employees train lower paid foreign workers hired through H1-B visas to replace them.

The Candidates

Republican presidential front-runner Donald Trump’s changing views on the hiring of foreign workers and specifically his positions on H1-Bs have made headlines. In the span of a few hours before, during and after Republican debates in March, Trump was against, for and then again against expansion of the H1-B program.

Two of Trump’s businesses, Mar-a-Lago Club in Florida and Trump Vineyard in Virginia, use foreign labor. When applying for the visas to hire employees through this program the companies claimed they could not find enough Americans to fill the jobs that pay $10.72 an hour for a 40-hour workweek.

Republican presidential candidate Ted Cruz has made it clear he is opposed to the H1-B program. He claims the plan eliminates American jobs.

Democratic presidential candidate Bernie Sanders recommended increasing the wages of H1-B workers. Sanders believes that by making foreign workers more expensive, American workers will be more attractive to employers. Hillary Clinton did not mention the H1-B issue in her immigration policy statement.

Bigger Picture

The overall hiring of non-U.S. citizens is part of the bigger immigration debate going on in political circles at several levels. Companies are only supposed to hire people who are legally in the U.S.

Employers are required to have prospective employees complete an I-9 form that verifies their legal status to work in the U.S. However, the employer does not submit the form to the government, but is required to keep it on file for three years and must produce it if subjected to an audit by the U.S. Immigration and Customs Enforcement agency.

Immigrants are now making up an increasing number of entrepreneurs in the U.S. While they account for about 13% of the population, immigrants start more than 25% of new businesses. They are also quite successful: more than 20% of the Inc.'s 500 CEOs in 2014 were immigrants.