Is Facebook’s immigration lobbying because it can’t find workers, or just wants to pay them less?

Are there enough people like this in the United States?
Are there enough people like this in the United States?
Image: AP Photo/Ben Margot
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Proposed changes to the US immigration system would be a boon for America’s tech companies, but some worry that if Facebook, Google and others get their way, it will just give them more leverage over employees at the bargaining table.

The legislation would increase the number of H-1B skilled worker visas by 45,000, to 110,000 each year, and make it easier for companies to hire more visa employees by exempting workers applying for permanent residency from hiring caps.

This is seen as a big win for Facebook’s muscular lobbying effort in Washington, although any number of different tech firms could claim credit the changes—the whole sector has been lobbying hard to hire more foreign professionals because they say they can’t find enough skilled workers in the US. But critics say the problem is overstated: It’s not that there aren’t enough professionals with the requisite ability to work for IT companies, it’s just that companies would rather bring in cheaper labor from abroad than pay US workers higher wages.

It’s a hard argument to resolve. For example, this 2012 analysis from the Economic Policy Institute (which is often sympathetic to arguments against bringing more workers to the US) argues that wages aren’t rising as fast as they would if there was a real labor shortage, and that while unemployment among tech sector workers is incredibly low, it’s not as low as we would expect if workers were really in such demand.

But that’s not the perception in the tech sector. You can look at what the Federal Reserve is hearing from businesses in its most recent Beige Book report: In many places in the US, it’s hard to find skilled information technology workers, and that’s driving wages up. It’s not an uncommon story.

“I can randomly fire one of my developers, they’d have a new job tomorrow morning,” Douglas Sellers, the CTO of FitOrbit, an online start-up, says. He told me about a college senior who interned for him. When the senior graduated, Sellers offered him a job working for $80,000 a year, but found himself outbid by Microsoft, who offered $100,000 a year plus more generous benefits. “That’s not even for anyone who is proven or has shown any track record of being any good at this.”

Experiences like that have convinced many lawmakers that more foreign talent would be a boon to the economy (economists tend to agree). But H1-B critics fear that the visa process lends itself to abuse. Workers are tied to a single company for the duration of their time in the US, which means in addition to the threat of firing, managers can offer up the threat of deportation when making unreasonable demands. And some foreign companies, including Indian IT outsourcing firms like Infosys, Tata Consultancy Services and Wipro, use H1-B visas to supply the bulk of their US workforce, undercutting American workers.

In response to these fears, the draft of the legislation says it will require companies to pay H1-B workers more than they would Americans, and increased the transparency of the hiring process. They also are limiting the number of visa employees a company can have to 50% by 2016, a move seen as a direct hit at the outsourcers. But, critics say, that move alone could free up a significant amount of visas, so why increase the cap? And others worry that the exempting visa workers who are applying for permanent residency from counting toward hiring caps could lead to a huge backlog in the process.

The biggest challenge may be figuring out how the bill’s sweeping provisions will affect each other and the labor market. Along with the highly-skilled visa reforms, it aims to make it easier for foreigners with advanced science, technology, engineering and math degrees to get permanent residency in the US, creates a new visa for entrepreneurs who want to start companies in the US, and adds 120,000 new merit-based visas.

Forecasting how all that will play out is as big a challenge as figuring out if the US has an IT worker shortage in the first place.