March 3, 2000

Uncapped immigration of high-skilled workers is key to future economic growth
Study shows H-1B workers benefit economy without harming U.S. workers or wages

American industry's explosive demand for highly skilled workers is being stifled by the federal quota on H-1B visas for foreign-born highly skilled workers. Additionally, the quota restrictions are hampering output, especially in high-technology sectors, and forcing companies to consider moving production offshore, according to a new briefing paper released today by the Cato Institute.

In "The H-1B Straightjacket: Why Congress Should Repeal the Cap on Foreign-Born Highly Skilled Workers," authors Suzette Brooks Masters, an attorney and member of the board of directors of the National Immigration Forum, and Ted Ruthizer, professor of immigration law at Columbia Law School and head of the Immigration Law Group at a New York law firm, argue that "H-1B hiring has contributed significantly to the growth and continued good health of our economy and has helped, not hurt the U.S worker." The authors also respond to the major criticisms of the visa status. Their findings include the following:

• "H-1B workers create jobs for Americans by enabling the creation of new products and spurring innovation. High-tech industry executives estimate that a new H-1B engineer will typically create demand for an additional 3 to 5 American workers."
• Reports of systematic underpayment and fraud in the program are false.
• From 1991 through September 1999, only 134 violations were found by the U.S. Department of Labor, and only 7, and average of less than one per year, were found to be intentional.
• "The lack of widespread violations confirms that the vast majority of H-1B workers is being paid the legally required prevailing wage or more, undercutting charges that they are driving down wages for native workers."
• "Wages are rising fastest and unemployment rates are lowest in industries in which H-1B workers are most prevalent."

The authors conclude by this analysis that the market should determine how many H-1B visas are needed. They argue that Congress should abolish caps on immigration of high-skilled workers and return to U.S. employers, subject to minimal regulation and unhampered by artificially low quotas, the ability to fill gaps in their workforce with qualified foreign national professionals.

"The H-1B Straightjacket: Why Congress Should Repeal the Cap on Foreign-Born Highly Skilled Workers"