Comprehensive Debate Kicks Off with High-Skilled Immigration

Earlier this week, the president and Congress officially kicked off immigration reform as a top agenda item for 2013. Also, the first bill of the year (S.169) was introduced Tuesday by a bipartisan group of senators that includes Christopher Coons (D-Del.), Orrin Hatch (R-Utah), Amy Klobuchar (D-Minn.), and Marco Rubio (R-Fla.). 

That bill, Immigration Innovation Act of 2013 (or I-Squared Act), focuses solely on high-skilled immigration—one of the least controversial aspects of immigration reform.  Strongly endorsed by the business community, the bill proposes to reform both the temporary and permanent high-skilled immigration system by tackling four areas: H-1B visas, student visas, green cards, and the money collected from visa fees to fund training of the existing U.S. workforce and STEM education.  Although this was introduced independently, legislators pledge to incorporate this bill into broader comprehensive immigration reform efforts.

The bill touches upon two problem areas highlighted in “The Search for Skills” Brookings report on H-1B workers: the need to dynamically adjust the visa cap to meet unmet demand for high-skilled labor; and the need to reform how H-1B visa fees are used to fund existing workforce and STEM education programs in the United States.  While the proposal makes progress in each area, further improvements are possible. 

The H-1B Visa Cap Escalator

Start with the total number of H-1B visas issued.  Each April, employers race against the H-1B cap to submit applications for the limited number of visas available to private employers.  Depending on the year, these visas can run out in a matter of days, weeks, or months.  For instance, during the Great Recession, the cap took as long as nine months to be reached, while during years of economic growth the cap was reached in a day or two.

The I-Squared Act proposes to replace the hard cap with an “H-1B escalator” that automatically adjusts the number of available visas depending on demand.  How does this work?  As written in the bill, if the new proposed cap of 115,000 is reached within the first 45 days, an additional 20,000 H-1B visas would be made available.  The number of additional visas is scaled down if it takes longer to reach the cap (15,000 more visas are released if the cap is hit on the 60th day, 10,000 if on the 90th, or 5,000 if on the 275th). Conversely, if the cap is not reached by the end of the fiscal year, the following year’s cap is reduced by the number of visas left unused the previous year.   

This is a good start at developing a market-based indicator for employer demand, but it only addresses one piece of the puzzle: employer demand.  The Brookings H-1B report recommended a more holistic solution: the creation of an independent panel of experts in a “Standing Commission on Labor and Immigration” in line with other organizations such as the Migration Policy Institute.  That special panel of the Commission would make real-time recommendations to Congress on H-1B cap levels based on local employment data, job projections, and insights from the business community.  This mechanism would allow H-1B visa cap levels to adjust to reflect broader national and regional labor market needs, rather than the outcome of a potentially artificial race to the cap that the proposed H-1B escalator might ignite.

Reforming U.S. STEM Education and Workforce Training

The I-Squared Act would also reform the programs funded by H-1B visa fees for existing workforce and STEM education training.  Brookings analysis shows that the federal government has invested the bulk of the $1 billion raised by H-1B visa fees over the last decade in short-term workforce technical skills training.  The majority of occupations for which employers request H-1B workers require extensive time-consuming education and training, especially in the STEM fields.  In line with the Brookings H-1B report’s recommendations, the new bill targets more funding from the visa fees to support long-term STEM education strategies.  The proposed legislation would charge employers a $1,000 visa fee for each application, and invest the proceeds in a new fund that the Department of Education would distribute to state governments based on competitive grant applications.  To obtain these funds, states would need to outline how they would improve STEM education to meet employer needs. 

The bill can be improved by requiring that state governments receiving funds work closely with local industry and educational institutions to develop programs to train students for jobs that will be in demand in the near future.  An example of a successful H-1B visa fee funded program is the Kansas Engineering Excellence Project that trained long-term unemployed individuals for B.A., M.A., or Ph.D. programs in engineering at Wichita State University.  The program’s success relies on the partnership between an advisory board of local employers and the university to create programs that would meet local employers’ future skills needs. 

The I-Squared Act represents an important kick-off to the comprehensive immigration reform debate focused on an area of relative consensus.  As the debate moves forward, additional refinements to its proposals would ensure that the nation and its regional economies can obtain the skills they need to be globally competitive.

See our immigration resources page for more key topics and relevant research and commentary.