In September 2003, the fee for H-1B visa applicants authorized by the American Competitiveness in the Twenty-first Century Act of 2000 expired. As of January 2004, funding for new projects was withdrawn. Any remaining funds must either be expended on existing grants or reprogrammed by the authorizing committee. Advances in telecommunication have allowed Indian programmers and telecommunications workers to perform their duties in India rather than having to obtain an H-1B visa. These advances, as well as the sagging economy, make further action in this area outside of comprehensive immigration reform unlikely, although the data on visa program participation point to how this reform may take place. Additionally, while the H-1B Technical Skills Training Grant program did not produce the results hoped for, it does offer some valuable lessons for the future of workforce development and education.
Visa Program Reform
The 2002 Yearbook of Immigration Statistics from the Bureau of Citizenship and Immigration Services includes a table of H-1B Beneficiaries by Occupation and Region and Country of Birth for Fiscal Year 2002. The summary analysis shows a dramatic drop off in Indian petitions from one-half to one-third. Two thirds of the most recent reported petitions for Indian programmers were for renewals. Even then, the vast majority of computer programmer petitions are Indian. However, the number of computer programmers as a whole has declined by almost two-thirds. Only about half of these have graduate degrees, while the vast majority of Chinese applicants have graduate educations, most likely obtained here.
Unpublished information from FY 2000 obtained from what is now the Bureau of Citizenship and Immigration Services (which is detailed in Appendix A) included a breakout of whether the applicant resided in the U.S. at application. Analyses of these data show three major populations using the H-1B visa:
a. Indian computer programmers, engineers and administrative professionals with Bachelor of Science degrees earned in India,
b. individuals from many nations who were already in the United States, most likely pursuing graduate degrees, and
c. traditional H-1B applicants who did not study in the United States who are employed in a variety of professions.
These populations are profoundly different. In reforming this program, they should be treated differently. The Iowa Center for Fiscal Equity offers the following recommendations.
1. In order to provide funds for the retraining of American programmers, a separate vise category should be established for programmers and electrical engineers, with the length of stay increased to five years and the processing fee increased to $5,000 per applicant. There should be no limit on the number of applicants admitted under this provision. After three of these five years, visa holders should be free to change jobs without reapplication.
2. A separate category should also be created for applicants who hold graduate degrees earned in the United States from an accredited institution. There should be no fee for this group and there should be no limitation on the number of individuals granted this visa. Expedited procedures should be created for processing these applications, which should be made in tandem with an application for permanent residency, ending the temporary nature of this category.
3. There should be no fee for traditional H-1B applicants in the non-computer fields who did not study here, although the quota on this type of applicant should remain at 65,000.
Technical Skills Training
In September 2002, the General Accounting Office issued a report on High Skill Training. If found that only about 40 percent of occupations in the first three rounds of grants awarded by the Department of Labor program qualified at the H-1B level, according to consultations between the GAO and the former Immigration and Nationalization Service. In its latest solicitation, the Department has stressed training at an H-1B level as a requirement for funding. The GAO also found a lack of coordination between the Departments of Labor and Commerce and the National Science Foundation on workforce issues.
In early 2003, the Department of Commerce examined the proportion of grants having to do with nursing. It found that more than a third of H-1B grants awarded up to that time were for nursing, which is not an H-1B occupation because registered nurses are admitted under a special waiver under the permanent residency program. The Department of Labor no longer awards grants in this area.
The collapse of the technology bubble and the attacks of September 11th, 2001 have changed the market for high tech workers. At present, the demand for technology workers in the defense industry has strengthened, while the demand for e-business workers has dried up. Most high-tech defense jobs require a security clearance and U.S. citizenship, rendering H-1B visa holders ineligible and casting doubt on the appropriateness of using H-1B training funds to train U.S. workers in this area, although the Department of Defense and the defense industry must clearly be involved in the high-tech training solution.
With all of its flaws, the H-1B training program offers great promise in revolutionizing both workforce development and the funding of higher education.
Grant recipients form partnerships between area businesses, educational institutions and the workforce development system to work in a coordinated fashion to meet workforce development needs. Some grant recipients the Center has been in contact with consider this collaboration to be the high point of the program, especially within the business community. Some grant recipients had already been awarded Department of Labor grants for partnership development and community audit, enabling them to more easily meet the informational requirements of the grant application process.
The H-1B training approach also offers an antidote to the ever-increasing cost of higher education. Department of Education surveys of these costs have shown that grant and scholarship aid have kept up with the cost of tuition at all levels of undergraduate education, but that in order to afford room and board costs students are increasingly forced to depend on educational debt.
At the Iowa Center for Fiscal Equity, we believe that this trend may have the effect of discouraging economically and socially disadvantaged students from pursuing undergraduate or vocational education, particularly in the African American and Latino communities who often have less access to and experience with banking and credit services.
Early evaluations of the early H-1B grantees uncovered promising practices that may evolve with time into a long-term solution to the problems of unequal access to education funding and the rising cost of higher education. At one site, students were hired at the beginning of their training, thus avoiding the problems of placement at the end of the program and providing for the payment of living expenses while in training. At another program, students were required to either pay a portion of the initial cost or take out a student loan for these costs. At the completion of training, the employer would reimburse the employee or assume the responsibility for paying off the loan. Finally, the general approach to contracting for education services has led to lower tuition costs, as consortia of businesses can often obtain a lower tuition rate than an individual student.
Taking all of these findings into account, we offer the following recommendations for taking technical skills training to the next level:
1. Establish an inter-agency consortium on technical skills training and education at the sub-cabinet level with all concerned agencies, including the Departments of Commerce, Defense, Education, Health and Human Services, Homeland Security, Housing and Urban Development and Labor and the National Science Foundation.
2. The Department of Labor remains the natural home for technical skills training programs, due to the strategic involvement of the workforce investment system, including the one-stop centers, which provide the lynch pin for the involvement of local business communities and for all other federal programs at the local level.
3. Funding for a wider-ranging program should come from both the H-1B application fee described above and from the various partner agencies, as suggested below:
a) A multi-stage application process should be devised. The Departments of Housing and Urban Development and Labor should provide funds for community audits, consortium building and the linkage of economic and workforce development planning activities. Based on the findings of these studies, consortia of businesses or unions, local workforce development boards, and educational institutions would apply for training funds from the relevant partner agencies. The Department of Homeland Security will provide up to date information on H-1B visa holders.
b) The Department of Defense would fund training for the defense industry.
c) The Department of Commerce would fund technology training in the non-defense sector, using a portion of H-1B application fees.
d) The Department of Health and Human Services would fund nursing education, possibly drawing on a fee to be charged to employers who sponsor nurses for permanent residency.
e) The Department of Education would provide undergraduate and vocational training funds under current programs. Unlike the current program, the extent to which these funds will be used will be laid out in the grant application, as would the use of any H-1B scholarship funds for disadvantaged students provided by the National Science Foundation.
f) The Department of Labor would review every funding proposal concurrently for the involvement of the workforce development system and for reporting requirements, which would remain with the Department.
4. Individuals would access these training funds through their local workforce development agencies (one stop centers). Funding for both vocational training and undergraduate education would come from a variety of sources.
a) One half to one third of the cost of tuition would be funded through grant funds.
b) Ideally, to begin training the individual would be matched with a sponsoring employer, who would pay the individual’s living expenses and may pay a third of the tuition expense. Practical work experience with the sponsoring firm should be a component of the educational or training program.
c) Living expenses should be supplemented with public funds for economically disadvantaged individuals with families.
d) Qualified individuals would also receive tuition assistance from Department of Education and National Science Foundation programs, as well as state programs.
e) The individual would obtain a student loan through the Department of Education for the remaining tuition cost, but not less than one-quarter of the cost of tuition. At the end of the training program, the individual would be employed by the funding employer for a period of one to two years for every academic year of training or education provided, depending upon the extent and cost involved. During this period of employment, the employer would reimburse the Department of Education on behalf of the trainee. If the trainee is terminated from the position or resigns, he or she will be responsible for the unpaid loan balance.
Appendix A
An Analysis of H-1B Visa Holders
The data for this analysis were provided by what is now the Bureau of Citizenship and Immigration Services in the Department of Homeland Security. These data go beyond what was published in the usual reports at the time it was obtained in November of 2002 for Fiscal Year 2000. Data were obtained which compare petitions approved by the Country of Birth, Major Occupational Group and whether the applicant resided in the United States when the petition was submitted. This last variable provides an insight into whether the individual received his or her education in the United States or overseas. This analysis was undertaken in order to determine whether the H-1B population was homogeneous in terms of their educational experience, especially among applicants from India in the computer programming and engineering fields. Please see the table at the end of this appendix for further information.
It is a well-known fact that the largest groups of H-1B applicants are of Indian origin. What is less well-known is that in the computer field Indians make up two-thirds of the total and four-fifths of those who come from outside of the United States. Of all Indian computer programmers, almost 84% were not residing in the United States prior to their application. Of Indian engineers, 54% were not residing in the United States, while almost 46% were and were presumably pursuing an education in this country. Almost 80% of Indian applicants pursuing a career in education at the university level were already here. More than 58% of Indians in remaining occupational groups were also already in the United States when application was made, which is more along the line of the average applicant. The inescapable conclusion is that Indian computer programmers and engineers are different. Interestingly enough, research on H-1B using companies has shown that two-thirds of the firms in the computer field have South Asian last names. This indicates, although does not prove, that the high demand for Indian H-1Bs may have as much to do with alumni networking as the quality of the Indian system. It may be that threats to move operations in this industry offshore absent an increase in the visa limit or because of an excessive fee are quite hollow. Separating this category of employment into a new visa category with an increased fee will provide much needed visibility to whether this is the case.
Chinese applicants form the next most numerous group. Of these, almost 83% were already in the United States, presumably pursuing graduate and undergraduate education. If one looks at previously published data on educational level and whether the applicant was already in the United States, one can easily conclude that most of those who were here already were pursuing graduate education, while most of those who were not resident hold only a Bachelors degree. This lends support for a separate category for advanced degree holders who obtained their educations in the United States.
The next largest cohort is from Canada. However, the number of Canadian H-1B applicants is dwarfed by the number of Canadians admitted under the North American Free Trade Agreement.
The final cohort to be addressed here are applicants from the United Kingdom. Like the Indians, the vast majority (almost 70%) was not in the United States at the time of application. More than 80% of computer programmers and almost 80% of engineers applied outside of the United States. More than 60% of education occupation applicants were in the United States at application, indicating that they were likely here pursuing graduate education. Unlike the Indians, however, almost 70% of applicants for all other occupations applied from outside the United States, indicating that they are among the true H-1Bs who were educated and credentialed in their home country and are coming to the United States on a truly temporary basis. It is also worth noting that Indians, Canadians and subjects of the United Kingdom are all fluent English speakers and therefore more attractive to employers without additional education, while Chinese students and applicants from most other nations are not typically as fluent and therefore not as employable without a stint at an American graduate school.
Finally, for the remainder of the occupations, no one country is dominant, although for the remainder of the nations, roughly one-third are in the computer programming area.
