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Contrarian Says U.S. Needs More H-1B Workers

By Stephanie Overby
November 2, 2010 03:06 PM ET

CIO - The U.S. federal government is moving in the wrong direction on H-1B visas, states Alex Nowrasteh, an immigration analyst at the Competitive Enterprise Institute (CEI), a non-profit, libertarian public policy think tank that describes itself as "advancing the principles of limited government, free enterprise, and individual liberty."

Nowrasteh believes all government quotas, rules and fees associated with temporary skilled worker visas, such as the H-1B and the L-1, should be abolished. Rapid growth in the technology and science sectors of the economy "has forced American firms to scour the world for talent," he writes in a new policy paper for the CEI. "American businesses should be free to employ the best worker for any job-from anywhere in the world." asked Nowrasteh why he thinks limitless H-1Bs would lead to more and better jobs for Americans. Many people on the opposing side of the skilled worker visa debate argue that the H-1B, L-1, and other visa programs need more regulation, not less. They claim that both American and foreign multinational corporations use those programs to important temporary skilled labor to replace higher-paid American workers or in lieu of hiring them. What is your response to that claim?

Alex Nowrasteh, Competitive Enterprise Institute:President Obama and Congress placed more fees on some H-1B candidates earlier this year. But they don't seem to realize that we live in a globalized world where skilled labor is highly prized. Firms like IBM and TCS are going to go where the skilled labor is located. If skilled labor can't move to the U.S. to work in American firms, those firms will go to where skilled laborers are. That's economic reality. It's time our immigration system adapts to it. The government...should stop wasting their time regulating labor markets or assuaging the groundless fears of "nativists."

What evidence can you provide to support your assertion that there is little direct competition between highly skilled foreign workers and their American counterparts?

The most persuasive evidence comes from econometric models created by [Gianmarco I.P.] Ottaviano and [Giovanni] Peri ["Rethinking the Gains from Immigration: Theory and Evidence from the U.S.," National Bureau of Economic Research working paper, October 2005]. After tracking employment data and comparing the inflow of foreign workers, the effect [of immigration] on native wages is the opposite of what you would expect for all but the lowest skilled laborers: they went up! You see this especially in geographic regions that experience the most immigration like Silicon Valley. More immigrant engineers require more support staff, like accountants and secretaries, but they also require other engineers trained in different, complementary fields. Often times those engineers are Americans. Since firms typically only hire foreign skilled laborers when they are expanding, the Americans who have worked in these firms for years get more responsibility and move up the chain of command.

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