Guest Worker Programs and the STEM Workforce

Fact Sheet 2013

For a PDF version of this fact sheet, click here.

The science, technology, engineering, and mathematics (STEM) workforce is central in the debate over specialty immigration visas. Skilled immigrants and guest workers are an important supplement to our science and engineering workforce when a labor shortage exists; however, evidence suggests the current system allows employers to substitute guest workers for U.S. workers, with potentially depressive effects on wages in those occupations.  Since the majority of STEM H-1B visas are for computer-related occupations, this fact sheet will provide particular focus on that STEM sector.

This fact sheet provides an overview of the H-1B and L-1 visas and dispels misconceptions regarding the supply and demand of U.S. workers in STEM fields.  The challenges facing U.S. STEM workers highlight the importance of reforming the U.S. high skilled immigration system.

Guest Worker Programs Relevant to STEM Occupations

  • H-1B visa: The H-1B visa is a nonimmigrant visa issued to employers who will employ guest workers temporarily in a specialty occupation or field.  The H-1B visa is issued for a period of up to three years but may be renewed for up to six years.  The number of H-1B visas is limited, although the cap has fluctuated throughout the program’s existence.[1]
  • L visa: L visas are often discussed alongside the H-1B visa.  There are two types of L-1 visas.  The L-1A visa is for persons employed at a managerial or executive level and is issued for a period of up to three years and renewable for a maximum of seven years.  The L-1B visa is for intra-company transferees who have specialized knowledge in the field; it is issued for a period of up to three years and is renewable for up to five years.  L-2 visas are issued to spouses of L-1 visa beneficiaries, allowing them to reside and work in the U.S. for the duration of the L-1 visa.
  • Optional Practical Training (OPT): OPT offers practical experience, through optional temporary employment, to F-1 student visa holders for up to 12 months.  Under a new rule, students working in STEM fields are eligible for a 17-month extension at the end of one year, with the option of later applying for an H-1B visa.

STEM and Guest Workers: Recent Trends

  • The U.S. Department of State issued 134,212 L visas in fiscal year (FY) (October 1, 2010 – September 30, 2011) 2012.  Among those, 64,430 were L-1 visas and 71,782 were L-2 visas.  L visas were issued in nearly 200 countries; however, 29 percent of L-1 visas went to guest workers born in India.[2]
  • FY 2012 saw a three percent decrease in approved H-1B petitions, from 269,653 in FY 2011 to 262,569 in FY 2012.[3]  While approved petitions for initial employment increased 29 percent, approved petitions for continuing employment declined 23 percent from FY 2011 to 2012.[4]
  • In FY 2012, 154,869 (59 percent) of H-1B recipients were approved in computer-related occupations. In addition, 26,329 were approved in architecture and engineering occupations; 4,820 in life sciences; and 4,969 in mathematics and physical sciences.  Together these STEM fields totaled 190,987 workers, 73 percent of H-1B approvals in FY 2012.[5]  Computer-related occupations accounted for 81 percent of STEM-related H-1B visas.

Number of H-1B Visas Granted Between FY 2006 and FY 2012[i]

H-1B Applications Granted[6]

 

FY 2006

 

FY 2007

 

FY 2008

 

FY 2009

 

FY 2010

 

FY 2011

 

FY 2012

All Occupations 270,981 281,444 276,252 214,270 192,990 269,653 262,569
Computer-Related Occupations 130,556 139,628 137,010 88,960 90,802 134,873 154,869

 

  • In 2011, over 92,000 students were approved for OPT.  Also in 2011, U.S. Citizenship and Immigration Services (USCIS) disclosed that 13,179 students took advantage of the STEM extension.[7]

The Limitations of Cap Limitations

There is no annual cap on OPT, L-1, or L-2 visas. While the annual H-1B guest worker cap is set by statute at 65,000, several exemptions to the cap cause the number of H-1B visa recipients to far exceed 65,000 each year.

  • The U.S. permits institutions of higher education, their affiliated non-profit entities, non-profit research organizations, and government research organizations unlimited H-1B visas. These visas are in addition to those subject to the 65,000 visa cap.[8]
  • Beginning in 2004, another exemption allowed an additional 20,000 H-1B visas for U.S. educated guest workers with advanced degrees (at least a master’s degree).[9]
  • The H-1B visa is renewable for up to six years and USCIS renewed some 124,000 visas in FY 2012.[10]

Oversight of Guest Worker Programs

No single government body is responsible for oversight of employment-based visa programs in their entirety. The system, according to the DOL, is “a complex process that may involve a number of government agencies.”[11]

  • In 2006, the Government Accountability Office noted: “[the Department of] Labor’s oversight of the H-1B program is…limited by law to identifying omissions and obvious inaccuracies, but we found that it does not consistently identify all obvious inaccuracies […] For example, although the overall percentage was small, they found 3,229 certified applications with a wage rate on the application that was lower than the prevailing wage for that occupation in the specific location.”[12]  While small, this type of wage fraud creates an unfair advantage for employers who hire guest workers.
  • According to former Secretary of Labor Ray Marshall, the current system of employment-based immigration, is “rigid, cumbersome, and inefficient; [does] too little to protect the wages and working conditions of workers (foreign or domestic); [does] not respond very well to employers’ needs; and give[s] almost no attention to adapting the number and characteristics of foreign workers to domestic labor shortages.”[13]
  • The Immigration and Nationality Act requires that the hiring of a guest worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.  Therefore, U.S. Department of Labor (DOL) regulations require that the wages offered to a guest worker must be the prevailing wage rate for the occupational classification in the area of employment, as defined by the National Prevailing Wage Center.  While there is no prevailing wage requirement for L visas or OPT, the H-1B program requires employers to pay the prevailing wage or the actual wage paid by the employer to workers with similar skills and qualifications, whichever is higher.  Yet, problems with regulatory enforcement remain.[14]

U.S. Supply and Demand for STEM Workers

Labor market indicators do not demonstrate a shortage of IT workers.  Statements suggesting a need for more temporary guest workers for IT positions are anecdotal.  According to the Urban Institute, industry claims of pervasive shortages of qualified workers are just not true.  Often, managers’ complaints about an inability to hire qualified workers do not rest in a lack of qualified applicants, but in expectations to hire low-wage workers who have specific work experience and do not require additional training.[15]

In June 2013, there were nearly 3.8 million workers in computer-related occupations.  Nearly 11 percent (405,000 workers) reported they were not U.S. citizens.  The concentration was higher among computer systems analysts (19 percent) and software developers, applications and systems software (17 percent).  Many experts have argued that this high concentration is affecting wages in IT.[16]

Stagnant Wages in Information Technology (IT) Occupations

  • A 2009 study suggests that H-1B admissions were associated with about a five to six percent drop in wages for computer programmers and computer systems analysts.[17]
  • According to the Bureau of Labor Statistics, real wages for workers in computer and mathematics occupations were flat from 2004 to 2012; however, employment grew by 23 percent.[18]  By way of comparison, healthcare practitioner and technical occupations had a 20 percent increase in employment, accompanied by a five percent increase in real wages from 2004 to 2012.[19]  “Until about 2001, when the dot-com bubble burst, the IT labor market performed in the way that economic fundamentals suggest it should, with the supply of IT graduates and workers responding to strong wage increases and reflected in growing employment.”[20]
  • A Congressionally-mandated study released by the National Research Council—the principal operating arm of the National Academy of Sciences and the National Academy of Engineering—found “the current size of the H-1B workforce relative to the overall number of IT professionals is large enough to keep wages from rising as fast as might be expected in a tight labor market.”  Further, it also found, “no analytical basis on which to set the proper level of H-1B visas,” and concluded that “decisions to reduce or increase the cap on such visas are fundamentally political.”[21]

Supply—Incumbent Workers

  • A study by the Urban Institute suggests that labor market indicators do not demonstrate a shortage of supply. [22]
  • According to a 2012 report published by the National Science Foundation, approximately 17.2 million individuals held science and engineering degrees in 2008.  The same year, an estimated 5.4 million workers were employed in science and engineering occupations.[23]
  • A recent Congressional Research Service report presents concerns that foreign nationals could displace U.S. residents in the STEM fields. According to the report, “Some analysts observe that the only high-skilled occupations that experienced negative wage growth in recent years were technology-related occupations (e.g., computer programmers and engineers)—occupations in which highly-educated foreign nationals cluster.”[24]
  • An April 2013 report found that “in computer and information science and in engineering, U.S. colleges graduate 50 percent more students than are hired into those fields each year” suggesting an imbalance in the supply and demand.[25]
  • In June 2013, the unemployment rate was four percent for computer and mathematical occupations; 3.9 percent for architecture and engineering occupations; and 3.5 percent for life, physical, and social science occupations.  All of these unemployment rates were below the overall unemployment rate, but about double the unemployment rate from the summer of 2008 when the economy was last at full employment. [26]

Supply—the Education Pipeline

            The IT industry draws talent from outside traditional computer science degrees and a variety of education backgrounds.

  • “[T]hree-quarters of the IT labor market is composed of workers with degrees other than computer science or without a college degree at all, suggesting that there is a very large domestic pool of potential workers available for the IT industry.”[27]
  • In 2010, over 500,000 bachelor’s degrees and over 100,000 master’s degrees were awarded to U.S. citizens and permanent residents in science and engineering fields.[28]
  • In 2011, over 37,000 associate’s degrees were conferred in computer information and support services, and over 35,000 associate’s degrees in engineering and related fields.[29]
  • In June 2013, 32 percent of workers in computer and mathematical occupations reported their highest grade completed was an associate’s degree in an academic program or less; 47 percent reported their highest degree earned was a bachelor’s degree.  A similar distribution was observed for workers in architecture and engineering fields.[30]

Demand—Labor Market Conditions

  • Computer and mathematical occupations saw 23 percent employment growth from 2004 to 2012 (adding 662,920 jobs).  Architecture and engineering employment declined one percent from 2004 to 2012 (losing 16,240 jobs) and life, physical, and social science occupations declined two percent (losing 27,290 jobs).[31]
  • Aggregate estimates indicate that as many as one in two STEM graduates do not find employment in STEM fields.[32]
  • A May 2013 report by the Georgetown University Center on Education and the Workforce found that in 2010 – 2011, the unemployment rate for recent college graduates with a degree in engineering was 7.4 percent; unemployment for recent college graduates in life and physical sciences was 7.3 percent; and the unemployment rate for recent college graduates in computers and mathematics was 9.1 percent.[33]

Flat wages, an abundant supply of new talent, and unemployment rates belie the claims of a labor shortage.  Skilled guest workers are an important component of a thriving and successful economy.  However, to limit employer abuses and preserve opportunities for domestic labor, there must be limits placed on employers hiring guest workers.

Effective employment-based immigration reform is necessary.  Both the AFL-CIO and the Change to Win labor federations have adopted immigration frameworks similar to that developed by former Secretary Marshall and the Economic Policy Institute (EPI).  This framework has five major interconnected pieces:

1) An independent commission to assess and manage future immigration flows, based on labor market shortages that are determined on the basis of actual need;

2) A secure and effective worker authorization mechanism;

3) Rational operational control of the border;

4) Adjustment of status for the current undocumented population; and

5) Improvement, not expansion, of temporary worker programs, limited to temporary or seasonal, not permanent, jobs.[34]


[i] Numbers reflect both renewed and newly granted H-1B visas.  The total number of H-1B visa beneficiaries working in the U.S. at any given time is unknown.  Furthermore, it is important to remember that these numbers do not account for those who have remained in the labor market after their visa expired. Estimates indicate that 40 to 45 percent of undocumented immigration can be attributed to immigrants who have overstayed their legally obtained visas.  See Ray Marshall, Immigration for Shared ProsperityA Framework for Comprehensive Reform (Washington, DC: EPI, 2009) for a further explanation of methodological problems.



[1] U.S. Department of Homeland Security, “H-1B Fiscal Year (FY) 2013 Cap Season,” U.S. Citizenship and Immigration Services, June 12, 2012, Web.

[2] U.S. Department of State, “Nonimmigrant Visa Statistics: Nonimmigrant Visa Issuances by Visa Class and by Nationality FY2012.” Web. http://www.travel.state.gov/pdf/FY12NIVDetailTable.pdf

[3] U.S. Department of Homeland Security, Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2012, Annual Report, (Washington, D.C.: U.S. Department of Homeland Security, 2013), 5.

[4] Ibid.

[5] Ibid. at 12.

[6] Homeland Security, Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2012, Annual Report, (Washington, D.C.: U.S. Department of Homeland Security, 2013); U.S. Department of Homeland Security, Characteristics of Specialty Occupation Workers: Fiscal Year 2006, Annual Report, (Washington, DC: U.S. Department of Homeland Security, 2007), 11-12.; U.S. Department of Homeland Security, Characteristics of Specialty Occupation Workers: Fiscal Year 2007, Annual Report, (Washington, DC: U.S. Department of Homeland Security, 2008), 11-12.; U.S. Department of Homeland Security, Characteristics of Specialty Occupation Workers: Fiscal Year 2008, Annual Report, (Washington, DC: U.S. Department of Homeland Security, 2009), 11-12.; U.S. Department of Homeland Security, Characteristics of Specialty Occupation Workers: Fiscal Year 2009, Annual Report, (Washington, DC: U.S. Department of Homeland Security, 2010), 11-12.; U.S. Department of Homeland Security, Characteristics of Specialty Occupation Workers: Fiscal Year 2010, Annual Report, (Washington, DC: U.S. Department of Homeland Security, 2011), 11-12.

[7] U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, electronic disclosure to author on May 23, 2012.

[8] U.S. Department of Homeland Security, “H-1B Fiscal Year (FY) 2013 Cap Season,” U.S. Citizenship and Immigration Services, June 12, 2012, Web.

[9] Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2012, Annual Report, 4.

[10] Ibid., at 12.

[11] U.S. Department of Labor, “Hiring Foreign Workers”, Employment and Training Administration, 2012. Web. http://www.foreignlaborcert.doleta.gov/hiring.cfm

[12] Government Accountability Office, “H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information Sharing with Homeland Security,” June 22, 2006. http://www.gao.gov/new.items/d06720.pdf.

[13] Marshall, Ray.  Immigration for Shared Prosperity–A Framework for Comprehensive Reform, (Washington, DC: Economic Policy Institute, 2009), 1.

[14] U.S. Department of Labor, “Foreign Labor Certification: Prevailing Wages.” Employment and Training Administration, 2012. Web. http://www.foreignlaborcert.doleta.gov/pwscreens.cfm

[15] B. Lindsay Lowell and Hal Salzman, “Into the Eye of the Storm: Assessing the Evidence on Science and Engineering Education, Quality, and Workforce Demand,” The Urban Institute, 2007.

[16] U.S. Census Bureau, DataFerrett, Current Population Survey, Basic Monthly Microdata, June 2013.

[17] Prasanna Tambe and Lorin Hitt, “H-1B Visas, Offshoring, and the Wages of U.S. Technology Workers,” working paper, Council on Foreign Relations, April 14, 2009.  http://www.cfr.org/publication/19500/ssrn.html.

[18] U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics, Occupational Employment and Wages, May 2012 and May 2004. Accessed August 13, 2013.  Wage inflation calculation done using the U.S. Bureau of Labor Statistics inflation calculator.

[19] U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics, Occupational Employment and Wages, May 2012 and May 2004. Accessed August 13, 2013.  Wage inflation calculation done using the U.S. Bureau of Labor Statistics inflation calculator.

[20] Salzman, H., et. al., Guestworkers in the High-Skill U.S. Labor Market: An analysis of supply, employment, and wage trends. Economic Policy Institute, April 24, 2013.

[21] National Research Council, Building a Workforce for the Information Economy, (Washington, DC: National Academy, 2001), 187.

[22] B. Lindsay Lowell and Hal Salzman, “Into the Eye of the Storm: Assessing the Evidence on Science and Engineering Education, Quality, and Workforce Demand,” The Urban Institute, 2007. http://www.urban.org/UploadedPDF/411562_salzman_Science.pdf.

[23] National Science Foundation. “Science and Engineering Labor Force,” Science and Engineering Indicators 2012, 2012. Web. http://www.nsf.gov/statistics/seind12/c3/c3h.htm

[24] Ruth Ellen Wasem, “Immigration of Foreign Nationals with Science, Technology, Engineering, and Mathematics (STEM) Degrees,” Congressional Research Service, May 11, 2012. Web. http://www.fas.org/sgp/crs/misc/R42530.pdf, 2.

[25] Salzman, H., et. al., Guestworkers in the High-Skill U.S. Labor Market: An analysis of supply, employment, and wage trends. Economic Policy Institute, April 24, 2013.

[26] U.S. Census Bureau, DataFerrett, Current Population Survey, Basic Monthly Microdata, June 2013.

[27] Salzman, H., et. al., Guestworkers in the High-Skill U.S. Labor Market: An analysis of supply, employment, and wage trends. Economic Policy Institute, April 24, 2013.

[28] National Science Foundation, National Center for Science and Engineering Statistics. 2013. Women, Minorities, and Persons with Disabilities in Science and Engineering: 2013. Special Report NSF 13-304. Arlington, VA.

[29] U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Fall 2001 through Fall 2011, Completions component. (This table was prepared July 2012.) Table 312. Associate’s degrees conferred by degree-granting institutions, by sex of student and discipline division: 2000-01 through 2010-11. Available at: http://nces.ed.gov/programs/digest/d12/tables/dt12_312.asp

[30] U.S. Census Bureau, DataFerrett, Current Population Survey, Basic Monthly Microdata, June 2013.

[31] U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics, Occupational Employment and Wages, May 2012 and May 2004. Accessed August 15, 2013.

[32] Globalization of R&D and Innovation:  Implications for U.S. STEM Workforce and Policy, testimony of Harold Salzman, 110th Congress, 2007.

[33] Anthony P. Carnevale & Ban Cheah, “Hard Times 2013: College Majors, Unemployment and Earnings,” Georgetown University Center on Education and the Workforce. May 2013.

[34] Marshall, Immigration for a Shared Prosperity.

 

The Department for Professional Employees, AFL-CIO (DPE) comprises 20 AFL-CIO unions representing over four million people working in professional and technical occupations. DPE-affiliated unions represent: teachers, college professors, and school administrators; library workers; nurses, doctors, and other health care professionals; engineers, scientists, and IT workers; journalists and writers, broadcast technicians and communications specialists; performing and visual artists; professional athletes; professional firefighters; psychologists, social workers, and many others. DPE was chartered by the AFL-CIO in 1977 in recognition of the rapidly growing professional and technical occupations.

 

Source: 
DPE Research Department
815 16th Street, N.W., 7th Floor
Washington, DC   20006

Contact:
Jennifer Dorning                                                                                                                                                              August 2013
(202) 638-0320 extension 114
jdorning@dpeaflcio.org

 

For a more complete treatment of guest worker programs please see:

Gaming the System: Guest Worker Visa Programs and Professional and Technical Workers in the U.S., (Washington, D.C.: DPE, AFL-CIO, 2012); Ray Marshall, Immigration for Shared Prosperity–A Framework for Comprehensive Reform, (Washington, DC: EPI, 2009); or the DPE Fact Sheet “Guest Worker Visas: The H-1B and L-1.”

For more information about professional and technical workers, check DPE’s website: www.dpeaflcio.org