Giving the Market a Microphone: Solutions to the Ongoing Displacement of U.S. Workers Through the H1B Visa Program

Sam Trimbach | January 1, 2017

Abstract: In recent years, the H1B visa program has been mired in controversy.  Some have pointed out the way the program is used to aid in outsourcing. Others have suggested that employers pay H1B workers less than their U.S. counterparts, effectively allowing employers to import cheaper foreign labor. In fact, these can go hand-in-hand. The less an employer has to pay an H1B worker, the less expensive it is to use the program to outsource jobs. In addition to these problems, this Note identifies one more: while the current structure of the program helps employers bridge a labor gap when there aren’t enough qualified U.S. workers in a field, it simultaneously perpetuates that labor gap so that U.S. workers do not enter the field and employers must continue hiring through the H1B program.

This Note argues that labor gaps are perpetuated because the program only requires employers to pay H1B employees what an average U.S. employee in a similar position makes. By filling these jobs at the same salary, the labor gap is bridged, but there is no increase in salaries. This means that U.S. workers have no incentive to move into the field and fill the labor gap. Without new U.S. workers moving into the field, a gap remains, and employers continue to use the H1B program. The H1B program has two aims: to allow U.S. employers to bridge a labor gap while ensuring that jobs aren’t permanently shifted from U.S. workers to foreign workers. By perpetuating the labor gap, the program only satisfies the first aim while thwarting the second; jobs are permanently shifted, only the jobs are in the geographical United States. As such, this Note argues that the H1B program should be revised so that employers have to pay more for H1B employees than for U.S.  employees. The intended effect would be that U.S. workers would see salaries increase in the field and more would begin to train to enter the field. This means the labor gap would be filled by U.S. workers over time, allowing the program to satisfy both of its objectives. Increasing H1B salaries would also make it more expensive to use the program to outsource, potentially curbing some outsourcing abuse of the program.