A Harvard professor’s suggestions for fixing the broken H-1B visa system

There has to be a better way.
There has to be a better way.
Image: Reuters/Mario Anzuoni
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Better selection with any visa

The allocation of H-1B visas is very inefficient, with the lottery system being used in the years with the greatest visa demand—precisely when US employers want to be most careful in their selections! The system implicitly favours applications for lower-skilled workers, such as those made by outsourcing companies, and it does not allow companies to prioritise among their candidates. This is silly: If the country has a dire need for data analysts, the system should direct precious visas toward people with these skills. 

Many of these ills could be mitigated through simple wage ranking of applications. Rather than having a mad scramble in the first week, a longer horizon of a month could be used to collect applications. Applicants could then be ordered, with selection proceeding down the wage rankings until the visa supply is used up. To the extent that applications are withdrawn (e.g., the immigrant goes elsewhere, the company shuts down), marginal applicants could be admitted from a waiting list.

There are reasonable objections to wage ranking—most important, a person’s salary does not capture his or her full contribution to society. Indeed, America might value the altruistic social worker striving to rebuild US cities more than those engaged in much higher-paid work. While this counterargument is important, wage ranking accomplishes a tremendous amount in a very straightforward manner, which is important politically and for effective implementation.

It might be useful to install occupational and regional maximums alongside wage ranking, so that all the visas are not all gobbled up by expensive coastal cities and very high-priced sectors. Immigrant entrepreneurs also deserve special policy attention—even though they are widely celebrated, American policies are stacked against them. Proposals like the Startup Act and the Attracting and Retaining Entrepreneurs Act argue for easier admission pathways for entrepreneurs starting high-growth, job-creating companies backed by reputable venture capital firms.

These are the types of spillovers we most want to encourage, but the employer-based nature of US policy creates substantial gaps in the pathways of entrepreneurs into America. Many countries have programmes to attract globally mobile entrepreneurs, often taking direct aim at those frustrated with the US system, and so America should act fast.

Taken a step further, the H-1B system is quite erratic with its April 1 filings and October 1 start dates. A quarterly system, which allocates one-fourth of the same number of visas throughout the year and has a shorter time lag until work start could help both workers and firms. America would be less likely to lose top talents who find themselves off cycle and don’t want to wait a year or more after narrowly missing the filing deadline. I cherish many memories of the first year and a half as (my now wife) Sari and I began dating, but her departure to Toronto for fourteen months while she waited for her H-1B visa to be granted and start does not make the list. While the expenses and days apart added up, we had it quite easy compared with many others, and there is no rationale for such a lurching time schedule.

To complement wage ranking and to preserve scarce visas for the best uses, America should also raise the H-1B minimum wage from $60,000 to a higher figure like $100,000, perhaps with a few lower thresholds for occupations like social work or entrepreneurship. This minimum level can be designed with automatic adjustments for future years that are based on inflation or changes in average US wages. If a higher minimum wage causes demand to fall short of supply at times, unused visas can be saved and reintroduced when supply becomes again constrained, with visas that sit too long simply expiring. There are downsides to wage floors, such as their mismatch to innovative jobs that may be better served with heavy equity incentives, but minimum wages can provide strong assurances to the public that visas are being put toward best uses.

These suggestions will foster a better selection of immigrants with whatever number of visas that exist. The sponsorship of high-skilled immigrants by employers has laudable features, and America should hold onto its best parts. But the system surrounding firms needs to be more carefully thought out considering the challenges we have discussed in this book. More broadly, America’s employment-based visas are only a modest share of an immigration framework that prioritises family reunification. With a view toward comprehensive immigration reform and a more skilled inflow, I generally favor further tilting U.S. immigration toward employment-based purposes, although the average skill level of family-based admissions has grown a lot recently and may soon close much of the gap in employment-oriented visas.

Better seat at the table for immigrants

Worker immobility and poor negotiating power are responsible for many abuses in labour markets. The H-1B programme inhibits mobility, creating the so-called indentured servants. An employer-based system relies on firms benefiting from their costly search and recruitment efforts, and this incentive should be maintained. But the system is playing with fire and risks exploitation if the lock-in is too great. Workers are vulnerable during certain stages of the green card applications, being scared to change employers (or even travel internationally to visit ailing family members). Faster processing and better assurance that job changes won’t damage an applicant’s chances after early processing steps are complete would be helpful.

As an even more radical consideration, why should a worker not have the right to apply for a green card directly? It seems unnatural that all the power rests in the employer’s hands. In the initial screening of workers, there are a lot of advantages by using firms to prioritise skills and select candidates on soft information that the government can’t see. But it is less obvious that firms play a special role in permanent residency decisions. Worker-initiated requests would undergo appropriate vetting, but this adjustment would make the employment pathway genuinely dual intent for workers and firms. This attractive prospect could lure in stronger immigrants and reduce exploitation. I support safeguards that protect H-1B workers, and none is as potent as giving workers the capacity to move when conditions are lacking or exploitative.

Better pathways that don’t create bottlenecks

We have visualised skilled immigration pathways as pipes of different sizes that fit together poorly, with various workarounds holding together seams that are about to burst. America needs a better system that removes such bottlenecks. In a perfect world, the US would establish a nonpolitical technical group to monitor and adjust immigration policies on a regular basis to optimise talent inflows, much as Australia and Canada attempt to do. The reality of American politics, however, rules out for now such “immigration engineering,” partly because of the potential impact of immigration on the relative strength of the Democrats versus Republicans. Consequentially, simpler and self-adjusting proposals work better.

A starting point is to index H-1B admissions to economic conditions. 

Decades-long political battles to set a fixed cap are counterproductive, and any chosen quota will not reflect a growing economy for long. America should first raise the cap from its present level of eighty-five thousand to reflect the growth over the past decade, and then index future visa increases to population growth or to the national employment growth for skilled workers. When combined with wage ranking and higher minimum salaries for H-1B workers, such indexing would accommodate sector growth in a more secure way. The public does not favor increasing the H-1B programme as it currently stands, but the nationwide mood is supportive of higher admissions if the immigrant inflow becomes more skilled.

The education pathway also requires close attention. America’s colleges and universities are a great boon, but they are turning out ever-larger cohorts of foreign graduates seeking access to the US labour market. A frequent call to action from lobbyists is to “staple a green card” to advanced science and engineering degrees from US schools. This proposal is attractive, as it alleviates an ever-worsening school-to-work bottleneck for one important group. But the proposal is also unsatisfactory in how it endows university admissions officers and faculty with the power to make permanent immigration decisions on behalf of America. While I hold no great love for bureaucracy, I favor decisions about green cards being made by the government rather than by unelected universities.

Even if the “staple policy” were limited to accredited schools, the incentives for gaining permanent residency are so strong that severe abuse would likely follow. There have been serious proposals, like Blueseeds, to build large ships parked off the California coast to provide access to Silicon Valley to those who cannot obtain an H-1B. While mostly living and working at sea, residents of Blueseeds could come ashore temporarily as tourists for business meetings. Not kidding, this proposal was serious! We have seen how universities create part-time employment workarounds for entrepreneurs who can’t get an H-1B visa, and how cash-strapped schools love foreign master’s students who pay full fare. This intensity suggests many unintended consequences from the staple policy: Imagine the pressuring and cajoling of faculty when a student is just one passing grade away from a green card.

Although I struggle with this aspect of the staple proposal, I am quite sympathetic to its underlying motivations. America needs policies that reflect and harness the many foreign students who want to stay for work. One possibility is to give graduating foreign students an automatic right to work temporarily in America. This duration could be in proportion to years of education in America or schooling levels. These students-turned-workers would then need to secure an H-1B visa, which would require a solid job, and they could pursue green cards just like everyone else. This plan can achieve the benefits of the staple proposal while also reducing risks and including more fields than just science and engineering.

Excerpted with the permission of Stanford University Press from The Gift of Global Talent: How Migration Shapes Business, Economy & Society byWilliam R. Kerr. We welcome your comments at