Sunday, December 23, 2007

Visas for Skilled Workers

You could argue that Craig Barrett's editorial in the Washington Post demonstrates self-interest, as relaxed standards for bringing skilled workers into the United States would benefit Intel. But Intel is a huge company - if Intel wishes to open offices in Europe and employ foreign workers under Europe's new "Blue Card" proposal, Intel can be expected to do that.
Despite the hot-button nature of immigration issues, though, E.U. politicians advanced the "Blue Card" proposal in late October.

The plan is designed to attract highly educated workers by creating a temporary but renewable two-year visa. A streamlined application process would allow qualified prospective workers to navigate the system and start working in high-need jobs within one to three months.
The current system in the U.S. is lacking on any number of fronts. First, it is abused by employers who wish to bring in overseas workers at rates of pay significantly below those of domestic workers. Second, workers are abused by employers who impose significant penalties if the employee attempts to switch jobs, effectively indenturing the H-1B worker to the employer. Third, some employers take full advantage of the weaknesses of the visa, withholding paystubs so workers cannot change jobs, and laying them off or underpaying them and threatening to fire them if the abuses are reported. Fourth, while it is understandable why the government wishes to restrict H-1B workers to certain jobs where there is a shortage of U.S. employees, the net effect of the restrictions is to reward employers for gaming the system while hampering the visa holder's ability to negotiate for a raise, change jobs, or to apply their skills in a way that may in fact be best for the U.S. economy (e.g., starting their own business venture either "on the side" or as an alternative to employment).

I suspect that some of the fears of a relaxed system - direct competition between U.S. citizens and foreign workers for the same jobs - would be lessened by a system that borrows from the E.U. "Blue Card". While it may seem a bit counterintuitive that giving foreign workers more latitude to compete with U.S. workers would not worsen the job market for U.S. workers, if foreign workers are freed to change jobs to pursue higher wages they will no longer be a "cheap alternative" to U.S. workers. An increased number of applicants for the same pool of jobs can depress wages, but I don't think it can be reasonably disputed that allowing employers to hire H-1B workers for below-market wages drags down the market as well. Our current system is supposed to prevent that from happening, but often instead contributes to that outcome.


  1. Craig Barrett and his cigar chomping friends at the WTO are just using the blue card as a propaganda ploy in order to erase borders. It’s a a self-serving sham to increase global labor arbitrage. Go here to read why:

  2. Being an ethical employer under the H1B system, as Intel effectively has to be due to its size and prominence (although let's assume for a minute it would *choose* to be ethical even if that weren't the case), are at a disadvantage under the H1B system - as it is horribly abused by a large number of small employers. It may be that the blue card system, per se, would be a boon for Intel and work to the detriment of U.S. workers. But that doesn't really speak the larger point of the post, which seems to be that the H1B system needs to be reformed.

    The Blue Card system appears to offer some significant improvements (and quite possibly also some significant harms) as compared to the current system. We can cherry pick the benefits, or ignore that entire alternative system, but we should reform the current H1B regime.