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Trump Takes a Smarter Approach on Immigration with ‘Hire American’

David Bier

President Trump signed yet another executive order impacting
immigration this week. His “Buy American, Hire American” order
is much more measured in its effects on immigration than initially reported. It only vaguely requires
agencies to propose new rules to “protect the interests of
United States workers” and to “suggest reforms to help
ensure that H-1B visas are awarded to the most-skilled or
highest-paid petition beneficiaries.”

No one knows how the agencies will implement this instruction.
But this administration’s track record thus far suggests that
these rules may end up as heavy-handed regulation, designed to keep
workers out, not improve the H-1B program. The president took this
approach with the security vetting executive order — shutting
down the entire system — when less draconian approaches were
available (namely, enforcing existing law on the standards for
evidence for visas).

His prior order also stretched the immigration laws to the limit
and, according to at least one federal court, broke the laws Congress wrote. The president should
avoid these mistakes this go-round. He is already off on the right
foot by leaving the substance of the issue to the agencies
responsible for the programs, instead of the White House lawyers
who bungled both the legalities and the rollout of the vetting
order.

High-skilled immigrants
are a massive boon to the economy and to U.S. Workers.

In general, companies demand more H-1Bs when they are hiring
workers of all types. The H-1B quota is filled quickly only in years when the unemployment rate in the
top H-1B occupations is already low, and foreign-born employment in
these fields moves in the same direction as native-born employment.
H-1Bs don’t increase overall unemployment in these
fields.

But the problem with the H-1B is that the free market does not
decide who hires the workers. Companies enter a visa lottery, and
the winners are those who bought the most tickets (i.e.
applications), not the ones who will pay the workers the most.
Large technology companies pay far more than is required, while some IT staffing firms pay the bare minimum.
This means that employers with low bids can compete for workers in
a way that they cannot in a market.

After the workers come, the government still prevents the market
from operating. H-1Bs cannot quit their job if their employer
underpays them or they will lose their status and be deported. If
they have a green card (or permanent residency) application
pending, as many do, they cannot leave at all without losing their
place in line. This is the only reason why H-1Bs can be paid
below-market wages: they cannot access the market.

President Trump cannot end the visa lottery or force companies
to pay more because Congress created those rules. But he does not
need to. The one thing that he can legally do is allow H-1Bs to
easily quit or change employers. Low-paying employers would not
even bother to apply if they knew that higher paying employers
could easily poach their workers. This would also attract even more
talented workers to come to the United States, which is exactly
what the president said he wants.

Overall, the H-1B visa has been a huge benefit to the United
States. The program allows employers to fill important positions
quickly. Every month that the 85,000 high skilled positions for
H-1B workers go unfilled costs the U.S. economy millions of dollars
in lost productivity. That lost output means lost jobs, wages, and
taxes that directly benefit American workers. This is why Congress

rejected
requiring a recruitment waiting period for H-1Bs.

Importantly, almost 95 percent of all high-skilled
immigrants who live in the United States start off initially in the
United States on temporary work visas — mostly the H-1B.
Shutting down the H-1B would effectively eliminate high-skilled
immigrants as well, and highly educated foreign-born workers were
responsible for at least 30 percent of all aggregate productivity
growth in the United States in recent years. This is due to their
entrepreneurship and inventiveness.

High-skilled immigrants are a massive boon to the economy and to
U.S. workers. President Trump has adopted a deliberative process on
amending the rules. Hopefully this leads agencies to adopt a policy
that is both legal and benefits the economy.

David Bier is
an immigration policy analyst at the Cato Institute’s Center for
Global Liberty and Prosperity.