The H-1B cap impedes innovation, report argues

In 2000, there was a tremendous push by the IT industry to increase the H-1B visa cap. The dot.com bubble had yet to burst and IT employment was on the rise, so Congress acted.  If you remember what happened then what’s going on today may seem awfully familiar.

 “If we don’t get increases in visas this year, all of us are going to feel the effect,” said one industry group spokesman in 2000. The need was urgent, said the trade groups.  

In 2001, Congress raised the cap from 115,000 to 195,000, despite the protest of IT workers, who were blaming the H-1B visa for lowing labor costs and fostering development of a then emerging offshore outsourcing industry.  After three years, the cap automatically reverted to 65,000. It later increased by 20,000.

The relatively quick exhaustion this year of the H-1B cap is reinvigorating an urgency to raise the cap. But the arguments today for doing so are different.

Instead of warning of a skills shortage, industry proponents say the U.S. needs more visas to remain innovative and competitive in global markets.  

The Partnership for a New American Economy, a group championed by New York Mayor Michael Bloomberg, released a study Monday, titled Patent Pending, that points to foreign-born workers as critical to innovation.

Its key findings include that “more than three out of every four patents at the top 10 patent-producing US universities (76%) had at least one foreign-born inventor.”

This group calls on Congress and the president to develop a “bipartisan solution” that ensures “top international graduates” have a clear path to a green card as well as to “raise or remove H-1B caps.”

This argument, broadly, takes two avenues.

The first is that the larger the pool of foreign workers, the more likely the U.S. is to capture the small percentage who will become true innovators and job creators.  

Second, with more engineering and technology workers generally, the U.S. will develop a much larger labor pool and be able to expand IT industry. To that point, this is what the report says:  

According to Walter Isaacson’s recent biography, one of the main concerns for Apple co-founder and CEO Steve Jobs over the final months of his life was a talent crisis in America. At a dinner of Silicon Valley executives attended by President Barack Obama in February 2011, Jobs reportedly told the President that a lack of talented US engineers was costing America jobs: Apple was employing 700,000 factory workers in China, Jobs said, because he couldn’t find the 30,000 engineers he needed to supervise such factory work here in the United States.

Even if the premise of this claim is true, labor cost and decades of moving manufacturing and electronics production offshore also figure mightily into Apple's calculus. 

This report doesn't pretend to look at the issues raised by critics. The H-1B cap deprives U.S. firms " of the innovators they need to launch new products that create American jobs," says Patent Pending, while avoiding any discussion about the visa's use in offshore outsourcing.

Nonetheless, congressional leaders will take sound bites and cover from this report.

H-1B critics who believe unfettered visa access will hurt some IT workers, will be treated as background noise, just as they were in 2000.

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