The Heritage Foundation (HF) recently declared that the H-1B cap of 65,000 visas is way too low. They think it should be raised to 195,000. It seems that calling for more H-1B visas is becoming an annual tradition at the Heritage Foundation. Go here to read their 2008 rendition.
One week after the commencement of the April 1, 2010 H-1B season, the USCIS announced it had received 42,000 petitions for H-1B visas. In view of the facts so far this year (please read previous newsletter), why would the Heritage Foundation feel the need to manufacture a "fact" like this one that are so easily disproved?
This visa is by far the most-used visa; the USCIS often receives hundred of thousands of applications within the first couple of days.April 7, 2009 Help the Economy and Federal Deficit by Raising H-1B Caps by Jena Baker McNeill and Diem Nguyen WebMemo #2384
Actually there are many types of visas that are issued in far greater numbers than H-1B, such as green cards and student visas, and L-1s may be surpassing H-1B in numbers. Furthermore there is no evidence that the USCIS has ever received so many applications within the first couple of days. Typically there is a slight rush on April 1st followed by a month or two more where enough petitions dribble in to meet the cap. They are just totally wrong about "hundred of thousands of applications" because it just doesn't happen.
The HF writers are knee deep in falsifying the facts and then they compound their blunders:
There is a popular myth that H-1B workers displace Americans because foreigners will work for less than Americans even if they have greater qualifications.
Several paragraphs of convoluted logic follow where they try to justify their point that employers wouldn't favor H-1Bs just because they are cheaper. These champions of market based economies try to totally deny that market forces affect the labor market. It's beyond weird!
Their next blunder is bizarre because generally speaking the HF is libertarian and they are very critical of centrally planned economies — and yet they make a socialist argument that as long as the government can mandate and enforce prevailing salaries all Americans are protected.
But this notion is entirely false. H-1B visas are provided to foreign workers only if employers prove that they are paying prevailing wages (equivalent to American wages for that occupation). In addition, employers must show that no American workers with the appropriate qualifications were available.
The term "prevailing salaries" is just a euphemism for price controls on wages. The HF condemns price controls, so you have to wonder if their adulation of prevailing wages is a case of hypocrisy or evidence of an organization that has two left feet. They seem to know something about ancient history but are blind when it comes to H-1B, and even worse they haven't learned anything from a book they quote that was written two decades ago.
Mere guesswork, critics may respond. Fine, but they can't shrug off what history teaches us about price caps. It's all laid out in a book published more than 20 years ago by The Heritage Foundation titled "Forty Centuries of Wage and Price Controls: How Not to Fight Inflation," by Robert Schuettinger and Eamonn Butler. The book outlines the unqualified failure of price controls from ancient Egypt forward.The Folly of Price Controls
The HF should be embarrassed that they accepted this one without verifying its veracity since it's from the totally discredited NFAP study last year by Stuart Anderson.
In reality, H-1B visas spur economic growth. The National Foundation for American Policy showed that, on average, for every H-1B employee hired, an additional five American employees were also hired.
Actually the NFAP claimed each H-1B created 7 jobs for Americans, so the HF downplayed the number. Even if it were true that each H-1B generated 5 jobs, wouldn't we be able to eliminate unemployment in the U.S. just by hiring enough H-1Bs? All we need to do is to divide the total number of jobless Americans by 5, and then import enough H-1Bs to put them back to work. Sounds silly, but that's what the HF and NFAP think!
If it wasn't for the notion that each H-1B generate 5 jobs, I would nominate this as the dumbest thing that they wrote:
President Obama has promised to cut the deficit in half in five years. Expanding the H-1B visa would be a relatively small but beneficial step in that direction.
You heard that right folks! Not only does each H-1B create at least 5 jobs, but they also decrease our federal deficit! This was another one borrowed from the NFAP that the Heritage Foundation should have the common sense to know better about repeating. Their logic if flawed and contradictory because if H-1Bs were paid the same prevailing salary, as HF claims, then there is no net gain in tax revenue. What actually happens however is that highly paid American workers who pay lots of taxes are replaced with lower paid H-1B or L-1 visa holders who pay little or no taxes. Every H-1B causes tax revenues to drop, not increase.
The HF purports to be in favor of free markets but they certainly don't apply their ideology to H-1B. They undercut their entire argument in favor of raising the cap. Read this:
Make the cap flexible. As the U.S. economy fluctuates through its business cycles, the demand for H-1B visas will rise and fall. Congress should establish a quota that, if met, automatically increases for the next year. In addition, unused visas should be recaptured for the next fiscal year.
Remember in the previous newsletter I explained that if more demand can justify a higher cap, then "what is good for the goose is good for the gander"! In other words, lower demand must mean that a lower cap is needed. If the Heritage Foundation really believed that the cap should be manipulated depending on market demand then they should have been calling for a lower limit, not higher.
On a personal note: About 6 years ago I attended a rather large FAIR meeting in Washington DC. The two of us made a big stink about H-1B and its connection to immigration and globalism. We were encouraging FAIR to pay more attention to this aspect of immigration because it's becoming a hot button populist issue. A Heritage foundation stooge stood up and told the crowd, while looking directly at the two of us, that the people who are making a big deal about H-1B and/or globalism are a fringe element that should ignored by mainstream immigration reform groups. I wasn't allowed to rebut his point, which was extremely frustrating to say the least, but as it turned out I didn't need to. For the most part FAIR ignored his advice and made H-1B a major issue of theirs. FAIR has talked many times about the connection between immigration and globalism so the Heritage Foundation even lost on that one.
The Heritage Foundation is actually quite good on illegal immigration, but they can't seem to break the leash held by their corporate masters when it comes to H-1B. It's always seemed odd to me that so many libertarians think H-1B is a good idea. If the Heritage Foundation continues to push for expanded H-1B programs they may one day be considered a fringe element. Poetic justice, perhaps?