Indicators Of The Year: Immigration Applications for H-1B work visas fell 16 percent in 2018 from 2017. Does that mean the U.S. could lose its edge in attracting global talent?
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Indicators Of The Year: Immigration

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Indicators Of The Year: Immigration

Indicators Of The Year: Immigration

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STACEY VANEK SMITH, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

CARDIFF GARCIA, HOST:

And I'm Cardiff Garcia. All this week, we are looking at some of our indicators of the year. These are numbers we feel had a special cultural or economic significance in 2018.

VANEK SMITH: Immigration - the debate this year over immigration was fierce, everything from the border wall debate to green cards.

GARCIA: And much of this debate centered around social issues. But of course changes made to U.S. immigration policy will also be felt throughout the U.S. economy.

VANEK SMITH: Today on the show, we take a look at the H1-B visa program - what it is, how it's changed and what it could mean for U.S. businesses and the economy.

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GARCIA: Today's INDICATOR is 199,000. That was the number of people who applied for an H1-B visa in 2018.

VANEK SMITH: H1-B is a work visa used to employ specialty workers in the U.S. on a temporary basis. And it's often referred to as the highly skilled worker visa because most of the slots are reserved for people who have a master's degree or above, and a lot of engineers and tech industry workers have this H1-B.

GARCIA: And this year, there were 85,000 slots available. So 199,000 applications is way more than the program could accommodate. But that number also represented a drop in applications of about 16 percent because last year in 2017, 236,000 people applied for an H1-B visa - so quite a drop-off.

VANEK SMITH: Bill Kerr is a professor at Harvard Business School. He says the H1-B visa has been a key part of one very important part of the U.S. economy.

BILL KERR: If you looked back over the last 15, 20 years, the sector that has benefited the most from high skilled immigration - it's the tech sector.

GARCIA: And Bill says H1-B visa applications - they used to be pretty straightforward and pretty easy to process. After all, highly skilled workers are what every country wants. And companies like Apple and Google and Microsoft - they've got a lot of muscle to process these applications.

KERR: The level of scrutiny that it's placing on applications - and I want to be candid here. There's probably some additional oversight that was important to add. So there was something where this could be done in a better, more careful way.

VANEK SMITH: But, says Bill, the scrutiny of H1-B visa applications stepped way up.

KERR: If you've missed this one part of the application, you're instantly kind of derailed from the process versus just being asked to complete the application and proceed forward. It's - and let's be clear. In some cases, when I say - when we say you're out, like, the deportation procedure begins.

VANEK SMITH: Oh, like - something like, oh, I forgot to fill in my ZIP code; now I'm being deported. Like, is it that?

KERR: There have been some examples that would be roughly in that level of detail where you forgot one page that was at the end of this, or you did some sort of small changes that were incorrect. And before we all - we had a sort of a benefit of the doubt that was being applied to the previous status of a person. Now that benefit of the doubt doesn't carry anymore.

VANEK SMITH: And the process for H1-B visas got a lot more difficult for companies, too, says Bill.

KERR: We've also got a lot of, you know, well-known companies that are struggling with, every time I send something in, I'm getting requests back for ever-more information. I'm a Fortune, you know, 100 company, and yet I'm being asked to prove that I could - that I can financially afford to have an H1-B worker on here.

GARCIA: And in August, the CEOs of companies like Apple and IBM wrote an open letter to the U.S. government complaining that these new obstacles to the work visa process were disrupting business operations and causing anxiety to workers.

VANEK SMITH: Karthik Raveendran is a software engineer for Google. He's originally from India, and he's been working in the U.S. tech industry since 2002, always with an H1-B visa.

Was there, like, ever stress around that process or was it pretty...

KARTHIK RAVEENDRAN: No.

VANEK SMITH: No.

RAVEENDRAN: It was like a routine. I never - no, there was no stress.

VANEK SMITH: It sounds like that changed.

RAVEENDRAN: Oh, yes.

VANEK SMITH: Karthik applied for a green card back in 2011, but he's from India, where it often takes more than 10 years to get approval. So he's still on H1-B visas.

GARCIA: And the H1-B program has been criticized because it puts people, in a way, at the mercy of their employers. If Karthik loses his job at Google and he can't find another job pretty quickly, he might have to leave the country. This can sometimes lead to people with H1-B visas accepting lower pay or working longer hours than their colleagues with citizenship just because they're frightened that they might lose their visa.

VANEK SMITH: Karthik says his experience with the H1-B visas have been good until this year. He applied for a new job, and the company said, we love you. You're hired, we think.

RAVEENDRAN: They said, hey, everything will be fine, but there is a teeny-tiny chance that things might go wrong. So I've never heard this before.

GARCIA: Karthik says a lot of his colleagues don't want to deal with the new difficulties, and so many of these colleagues and some of his friends have just left the U.S. for Canada and Australia. And his friends and family in India also talk about the new visa scrutiny.

RAVEENDRAN: Previously, like, 10 years ago, everyone was like, hey, I want to go to U.S. I want to get an H1-B, go to U.S. But now it's not necessarily the top choice. People want to move to either Australia, Canada because they don't want to deal with all the stress.

VANEK SMITH: Bill Kerr from Harvard Business School says this worries him. For decades, he says, the U.S. has attracted the top engineers and tech entrepreneurs and scientists in the world.

KERR: If I look ahead and imagine a - an environment where the U.S. has lost its edge for global talent, then I think we have sacrificed to other locations being at the scientific frontier. We have lost a strong engine for creating and expanding new work opportunities in the country. And so I would deeply regret giving up all of those things.

Now, the United States is not going just based upon that to, you know, kind of lose half of its GDP. But it's more about what kind of growth and innovation will keep us at the leading edge among countries and whether we are going to sacrifice that opportunity.

GARCIA: Of course people who criticize the H1-B program make a different argument. Their argument is that tamping down on H1-B visas might help certain workers in the U.S., the thinking being that if companies can't just grab talent from overseas, they might be inspired to train American workers. Here's what Bill thinks about that.

VANEK SMITH: Is anybody helped? Are there parts of the U.S. population that are helped when we see immigration go down?

KERR: At least for a short period of time, somebody typically benefits if an immigrant doesn't come to a country, at least in a work-based setting, because that made them more likely to hold onto a job, get a job. But in any kind of medium-run perspective or longer-run perspective, what we find is that there's not a fixed number of jobs, and there's not a limited - a limit on the number of opportunities. So the economy can grow and can absorb the immigrants and can in fact become strengthened by it. This is particularly true at higher skilled levels where perhaps we have innovation or we have new firms being created.

GARCIA: And Bill points out that one of the founders of Google is an immigrant from Russia, and the founder of Yahoo was from Taiwan. He worries that people like them might start the new Googles and Yahoos in another country.

VANEK SMITH: For their part, Karthik Raveendran and his wife want to stay in the U.S. It's their home. Still, he says, for the first time, they feel like their situation is unstable. So they took a precaution.

RAVEENDRAN: It's been 20 years, so I've settled down here. I have a house. We have a kid who's going to go to preschool within a year or so. So we have sort of established our lives.

VANEK SMITH: Yeah.

RAVEENDRAN: But we applied for, as a backup, the Canadian PR.

GARCIA: Canadian PR - that stands for Canadian permanent residency. Karthik and his wife were approved, and now they're just waiting to see what happens with their H1-B here in the U.S.

RAVEENDRAN: So we'll wait for another year or two. If things don't change or if things get worse, we'll have to look for greener pastures, so to speak.

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VANEK SMITH: THE INDICATOR's produced by Constanza Gallardo and Darius Rafieyan and is edited by Paddy Hirsch. Our intern is Echo Wang. And we're produced by NPR.

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