The contentious immigration bill lingering in Congress has sparked new debate regarding the H-1B visa program. The H-1B program authorizes the temporary employment of qualified individuals, who are not otherwise authorized to work in the United States, to employers who cannot obtain needed business skills and abilities from the U.S. workforce.
There have been many anecdotal and indirect attempts to estimate domestic worker availability for positions filled using the H-1B program. These estimates are complicated by the fact that qualified American workers may not be in the same locations as the jobs to be filled, and foreign workers are more willing to relocate to those areas. To examine the necessity of an expansion of the H-1B program (which is part of the recently passed Senate immigration bill), Bright analyzed labor condition applications (LCAs) by organizations intending to hire H-1B workers. We found a modest need for international talent. Importantly, we also found a wealth of active and qualified domestic job seekers for most of the tested H-1B positions and regions (View full report PDF: Bright.com Examines H-1B Labor Condition Applications).
For this report, Bureau of Labor Statistics data on LCAs (download raw data) were analyzed. The ten most frequently requested jobs to be filled by H-1B visas, and the five cities in which each of these jobs was most often requested, were identified. The Bright Score, an algorithm that instantaneously scores candidates for specific job openings, searched our database of approximately 1 million resumes from job seekers active in the last 45 days to locate qualified domestic workers.
The Bright Score identified, on average, 1.34 qualified U.S. job seekers for each listed position. The number of qualified candidates peaked at 12.42 for Financial Analysts, and dipped as low as 0.19 for Specialized Computer Occupations (a catch-all labor classification that includes a miscellany of computer professions), with Computer Systems Analysts at .28, and Computer Information Systems Managers at .87 rounding out the bottom.
The Bright Score also identified large numbers of qualified candidates within each of the top five cities for each of the top 10 jobs. However, the supply-demand ratio varied upon location and role. For example, in New York, LCAs are the highest in the nation for Financial Analysts (3,193), despite a surplus in supply of local qualified candidates (1.22 per position), as well as Management Analysts (1,707), with 0.82 qualified domestic candidates per position. Management Analyst is a classification most often used to describe management consultants.
While the demand here in San Francisco for Management Analysts is less (455 LCAs), if you are an employer in San Francisco and are looking to fill a Management Analyst position, there are 2.48 qualified candidates for every LCA application. On the other hand, San Francisco places forth in the nation in LCAs for Application Developers, yet only 0.54 qualified candidates per position can be found locally for this role. To summarize, while most roles can be filled with domestic talent, the H-1B program provides an opportunity to employers residing in demand-rich locations to recruit international talent.
Bright Hiring Solutions can be utilized to discover hidden domestic talent, lessening the need for many LCAs. However, Bright is also a beneficiary of the H-1B program. Bright actually discovered the Applications Developer skill gap a couple years prior when searching for a web applications engineer in December of 2011. Unable to find enough qualified candidates in San Francisco, Bright brought Nikko Bautista, a graduate in computer science from the preeminent Filipino university Ateneo de Manila, to San Francisco on an H-1B visa. He joined three other new domestic engineers hired from across the country, and has proven an integral part of the Bright team.
Other cities and positions also benefit from the H-1B visa program, including Troy, Michigan, where only 0.27 qualified candidates can be found for each Computer Systems Analyst position. Troy is a small city in an economically depressed region, so a shortage of qualified candidates is not surprising. However, in Houston, Texas, a populous city in an economically strong state and an up-and-coming tech region, only 0.15 qualified candidates were found locally for each LCA.
The above findings suggest an important role for the current H-1B program, but the mass shortages purported by industry lobbyists since the 1990’s are likely overstated. Our analysis suggests an overall supply surplus for H-1B roles. These findings are in line with those of UC Davis computer science professor Norman Matloff’s 2003 report on the H-1B program, where he rebutted the existence of a labor shortage in the 1990’s and early 2000’s by citing numerous studies, both for and against the H-1B program, that were unable to find a shortage. Instead, he concluded that the shortage was in cheaper labor, not skills, and companies were using H-1B’s to avoid paying U.S. workers at market rate, and to replace older, more expensive workers with cheaper foreign labor.
For graduate programs in STEM (Science, Technology, Engineering, and Mathematics) our report indicates an 88% increase in native enrollment and 13% decrease in foreign enrollment over the last decade, so there is not a lack of interest in STEM fields by American students. Even with a higher enrollment of foreign students in 2003, Matloff found that only 1.6% of all Ph.D. holders in computer-related fields had an H-1B. Matloff concluded that the real causes of the perceived shortage were companies’ inefficient hiring practices and unrealistic skill requirements. Companies were interviewing too many unqualified applicants, while requiring a litany of specific skills. In contrast, industry leaders such as Bill Gates value general programming skill more than specific skills.
Opposing these arguments is Giovanni Peri, a professor of economics at University of California Davis, who suggests that the H-1B visa program ultimately increases economic productivity. His studies reported the rise of wages and home prices (two indicators of a growing economy) in cities with a high-skilled immigrant workforce, and found no evidence that hiring foreign workers reduced employment of American workers with STEM degrees. Furthermore, he found that the H-1B program stimulates growth in tech companies, creating jobs in project management, marketing, sales, and other departments.
The current results and analysis suggest there is an important role for the H-1B program, providing an opportunity for employers in demand-rich regions to find necessary talent not available with in the domestic workforce. However, there there is also a need for many companies to re-evaluate their recruiting practices. The Bright Score bolsters efficiency in the labor market by helping companies immediately identify and locate qualified candidates to interview. Bright can be utilized by employers to discover previously hidden domestic talent, lessening the need for many LCAs and the associated paperwork. In addition, Bright is faster and less expensive; in a fraction of the time it takes to fill out a single LCA, the Bright will likely find many qualified candidates in your area.
View Bright’s full report in PDF: Bright.com Examines H-1B Labor Condition Applications
- Daniel Maurath, David Hardtke, Jacob Bollinger