H1B Visas and Their Impact on the Economy
Immigration is a very polarizing topic in the United States right now, and with approximately 11.4 million immigrants in the country, it is important to be informed about the subject.
An H1B visa a type nonimmigrant visa that allows high skilled foreign workers to work in the US for 3 to 6 years. The annual cap is 65,000 with another 20,000 visas reserved for those with a masters degree or higher. Companies apply for the visas by paying a fee and guaranteeing that no US workers will be displaced or disadvantaged in the process. A majority of the workers come from India and go into the STEM sector.
With tens of thousands of these workers entering the US every year, lasting impacts can be seen, particularly in the US economy.
Wages
Most H1B recipients going into technology fields, and many of them are advanced software engineers and computer programmers. This creates a demand within the companies for medium-skilled workers that compliment the H1B workers. And because H1B recipients are strictly high skilled, that demand is for US workers who experience a raise in wages and employment as they are more sought after.
Conversely, the high skilled US workers in the same field as H1B workers have to compete with them for jobs. And because H1B workers are generally paid lower on average than their US native counterparts, the amount employers are willing to pay for the job goes down.
Between these two effects, the first generally overpowers the second. This is because only a third of the US population is college educated, so affects to medium and low skilled natives are more widely felt.
Employment
Overall, H1Bs have a positive effect on US employment. The Economist and CNBC have both noted that for every H1B visa that is granted, 5 american jobs are created. And while that may seem like a lofty claim, there is evidence and reasoning to back it up. High skilled immigrants in the US create businesses, particularly in the tech industry that H1Bs dominate, and therefore create jobs. This is supported by The New American Economy, which says that, “Immigrants started 28 percent of all new businesses in 2011,” and the Fiscal Policy Institute, which says that, “small businesses owned by immigrants employed an estimated 5 million people in 2010,” In addition, some of these businesses grow into massive companies that provide jobs to thousands of Americans. For example, Alphabet’s president is Sergey Brin, who was born in Russia.
H1B visa recipients have substantial impacts on the US and it’s economy. They primarily affect wages and employment, which are two very important numbers in today’s world.
