June 19, 2020 3:16PM

H-1B Workers Are Helping to Save Jobs During the COVID-19 Recession

The large increase in unemployment during the COVID-19 pandemic, caused by individual changes in behavior and government policies, have prompted the Trump administration to consider suspending many temporary work visa programs. Among those visa programs on the chopping block is the H-1B visa for skilled foreign workers. In 2019, two‐​thirds of migrants received the H-1B visa to work in computer‐​related occupations with many of them employed in the information technology (IT) sector. IT is an important source of productivity growth, but it became more obvious how important it was for saving employment opportunities during the COVID-19 pandemic.

According to research by economist Adam Ozimek, “Remote work has risen rapidly as a result of the pandemic, with more than half of the American workforce currently working from home.” Crucially, he found that “the ability to work remotely has reduced the risk of job loss early in the crisis by 32 percent to 53 percent.” According to related research by Ozimek and others, “[S]tates with a higher share of employment in information work … were more likely to shift toward working from home and had fewer people laid off or furloughed.”

The supply of IT services has smoothed the shift to remote work for about half of the workforce and saving large numbers of jobs in the process. Even so, problems with technology was the biggest reported issue with shifting to remote work. Imagine how much more difficult such a shift would have been without the IT services supplied by H-1B workers, Indian IT firms, and other skilled immigrants.

Economists Gaurav Khanna and Nicolas Morales found that H-1B visas for Indians increased the standard of living by approximately $14.7 billion in total in 2010. About 96 percent of those economic gains accrued to the migrants themselves, but about 3 percent ($431 million) accrued to Americans and 1 percent to Indians in India. Much of the benefit was also provided by IT firms in India that grew, in part, due to returning IT workers from the United States as well as the general increase in computer science graduated spurred by U.S. demand for Indian technology workers. Those Indian IT firms, in turn, exported IT services to the United States and insourced workers.

Without the increase in immigrant computer scientists, total computer science employment in the United States would have been 3.8 percent to 9 percent lower and output consequently smaller. Wages for computer scientists would have been 3–4 percent higher without the immigration but that doesn’t include the employment effect on other occupations that were able to expand due to more abundant IT services. Immigration also lowered prices and raised the output of IT goods by between 1.9 percent and 2.5 percent which complemented production in other areas of the economy.

On the firm level, H-1B workers increased the wages of native‐​born American workers with the same job title in Deloitte, likely resulting from increased complementarity and division of labor that is possible from more H-1B workers. On the local level, the spillover effects are large. Economists Giovanni Peri, Kevin Shih, and Chad Sparber found that “a 1 percentage point increase in the foreign STEM share of a city’s total employment increased the wage growth of native college‐​educated labor by about 7–8 percentage points and the wage growth of non‐​college‐​educated natives by 3–4 percentage points.”

We’d clearly be in a worse economic position without the contributions of skilled immigrants. If more skilled workers were able to have immigrated in the previous decades, whether on a larger H-1B visa program or through expanded numbers of employment‐​based green cards, then IT services would have been even cheaper and more firms would have been able to efficiently move to remote work during the pandemic – undoubtedly saving many jobs in the process. Rather than seeking to curb the number of H-1B visas and accepting absurdly long wait‐​time for employment‐​based green cards, Congress and the administration should seek to increase the number of these immigrants who can come here and making it possible for them to quickly earn green cards.

The above research on the productivity and wage‐​spillovers from H-1B workers all analyze the pre‐​COVID‐​19 economy. Future research into the economic contribution of H-1B workers and other skilled immigrants should attempt to estimate how many American jobs were saved during the COVID-19 recession. Technology problems have been the most serious impediments to expanding work from home during the pandemic and states with more information workers have seen smaller falls in employment. If IT services were more expensive, the transition to remote work would have that much more difficult and more workers would have lost their jobs as a result. Conversely, more skilled immigrants working in IT would have made the transition smoother, cheaper, and more complete. Although more research needs to be done into how H-1B workers and other skilled immigrants helped save jobs during the COVID-19 recession as well as the magnitude of their impact, the research that does exist indicates that those of us lucky enough to be able to work from home are in better shape because of them.