The tech industry's favorite visa program pushed down engineers' salaries | Ladders

The most popular hiring visa in the tech industry may find its influence waning.
Future of Work

The tech industry’s favorite visa program pushed down engineers’ salaries

The H-1B visa program has played a historic role in shaping who has access to specialized jobs— specifically, by temporarily hiring foreign employees at American companies that sponsor them.

But the program has also pushed down salaries for computer scientists, according to new research.

A February 2017 working paper included in the April 2017 version of The NBER Digest found that, based on the researchers’ model using data from 1994 to 2001, “in the absence of immigration, wages for US computer scientists would have been 2.6% to 5.1% higher and employment in computer science for US workers would have been 6.1% to 10.8% higher in 2001.”

The program changed the landscape of the American job market— many of the effects are still being felt today.

The H-1B visa created lower salaries

The number of people from other countries joining the “US high-skill workforce” increased quickly during the “Internet boom of the 1990s,” according to the working paper.

The document said that the amount of H-1B visas awarded every year by the federal government is “capped,” but that even though there was a big uptick in how many were given out to “high-skill workers” in the 1990s, people in “computer-related occupations” became “the largest share of all H-1B visa holders,” according to the U.S. General Accounting Office in 2000.

Steve Maas wrote about the the working paper in the April 2017 version of The NBER Digest.

“…some U.S. workers switched to other occupations, lowering the number of domestic computer scientists by between 6 and 11 percent,” Maas wrote.

He also pointed out that the researchers think that if immigration was more restricted during this time period, salaries, “domestic employment, and, as a result, college enrollment in computer science would have grown even more rapidly than it did.”

Positive impacts from the H-1B

But while the H-1B, a “non-immigrant visa,” disrupted the climate of the computer science field, it also created positive, lasting change: while those tech and engineering jobs paid less, there were more of them.

Maas wrote that “lower labor costs” led to higher profits, so new businesses were able to sprout up in the computer science industry, and other advances led to “expansion in related fields, raising wages for college graduates who were not computer scientists and for non-college graduates.

The researchers also made the case that slightly lower salaries for workers under H-1B visas allowed technology companies to create lower-cost gadgets for consumers at a higher profit to the company.

Big changes to today’s H-1B visa

The visa of choice for the tech industry is very likely to change under President Donald Trump.

The U.S. Citizenship and Immigration Services, or USCIS, introduced new regulations announced at the end of March, that changed how the government distributes H-1B visas to immigrants in computer programming— businesses now have to “prove” that potential candidates “are doing special, complex jobs requiring unique technical expertise,” as reported by Recode.

USCIS announced yesterday that it is taking further steps to find and prevent “H-1B visa fraud and abuse” among employers.

“The H-1B visa program should help U.S. companies recruit highly-skilled foreign nationals when there is a shortage of qualified workers in the country. Yet, too many American workers who are as qualified, willing, and deserving to work in these fields have been ignored or unfairly disadvantaged,” the news release said.

The department will reportedly prioritize these factors and occasions to stamp out criminal behavior during visits to “H-1B petitioners” and workspaces employing H-1B visa holders.

The news release said that the policy changes are “not meant to target nonimmigrant employees for any kind of criminal or administrative action,” but rather, to find employers who are violating the program.

Google reportedly weighed in on what yesterday’s policy means for its employees, according to an email secured by Recode.

“Wanted to quickly weigh in on behalf of the immigration team to let you all know that we’re following this and for now, don’t anticipate an impact to Googlers,” the email reportedly says.Our software engineering roles don’t fall into the job categories included in the USCIS’s [United States Citizenship and Immigration Services] new guidance. We’ll continue to watch the H-1B visa space closely and keep Googlers updated on any changes they need to be aware of.”

The influx of specially-trained immigrants through the H-1B visa program has had a lasting impact on the American labor market for decades, but its influence may be waning.