Debunking Issa’s “Protect and Grow Jobs Act”

Congressman Darrell Issa (R-CA), has proposed legislation which would drastically change the landscape of H-1B immigration in the U.S. The bill is called the “Protect and Grow American Jobs Act” (HR 170), but it may really have the opposite effect to the one intended.

According to Rep. Issa’s website, the legislation would, “close a loophole in the nation’s high-skilled immigration system being used by these companies to bring in cheaper foreign labor from abroad.” It would raise the prevailing wage for the positions to $100,000 per year (up from $60,000 per year currently) and eliminate the master’s degree exemption.

Moreover, the Congressman claims that these changes help keep American jobs. The website argues that raising the pay requirements “to a level more in-line with the average American Salary,” would prevent companies from abusing H-1Bs and “ensure these positions remain available for companies who truly need them.”

In addition to paying lower wages, the Congressman’s website argues that companies are allowed to become H-1B dependent (companies with more than 50 employees composed of great than 15% H-1B workers are considered H-1B dependent) due to the master’s degree exemption.

However, these companies must show evidence that they’ve advertised the job to American workers, which means they have not displaced American workers. Furthermore, these criteria can be waived for candidates paid more than $60,000 or hiring candidates with a master’s degree. This loophole was set in place in 1998.

The Congressman protests that foreign workers are boasting “low quality certificates” not comparable to U.S. master’s degrees to qualify for the H-1B master’s exemption.

Rep. Issa has presented this bill to Congress once before. However, the impending inauguration of Donald Trump has given this proposal leverage. There are vast implications for these proposed changes in immigration law. These changes do fall short of the Trump Administration’s proposed changes to the law which at one point suggested bolstering the prevailing wage.

The legislation has its roots in Silicon Valley where a company called Southern California Edison (SCE) laid off 500 employees and replaced them with workers from H-1B dependent firms. SCE paid the average outsourced employee less than $70,000 annually while its former employees made in excess of $100,000.

There is criticism of Rep. Issa’s bill on both sides. Rep. Zoe Lofgren (D-CA) has criticized the bill saying it would hurt Silicon Valley which composes a great deal of her electorate.  She also argues that the bill would not prevent outsourcing. Moreover, she notes that the $100,000 salary still undercuts the median annual salary for Silicon Valley which is $115,000 (engineers can earn a starting salary of more than $140,000). Lofgren’s bill would change how visas are allocated, awarding visas to companies willing to pay the highest salary instead of using the lottery selection process.

Others in congress are proposing more extensive changes to the H-1B program.  A bill coauthored by Senator Bill Nelson (D-FL) would slash 15,000 visas from the annual cap. Senator Ted Cruz (R-TX) has called for a minimum $110,000 salary for all H-1B holders alleging this is the equivalent of what Americans are paid for these roles.

The problem with representatives slashing the H-1B cap is that they utilize arbitrary figures. The prevailing wage determination uses data for positions in the county and stay where the position is located.  It is a far better measure than selecting a sum that may be higher or lower than actually used. On lowering the cap of 65,000 visas for all professional positions in the U.S., it is simply not based on the actual demand and need of U.S. companies trying to keep jobs in the U.S.

When slashing H-1Bs or generally making them more difficult to award, it’s important to remember that H-1Bs create jobs for Americans. H-1Bs granted between 2010 and 2013 are expected to create more than 700,000 jobs for U.S. born workers by 2020.  H-1Bs have a strong benefit to the American economy. Although abuse of H-1Bs is a real and important issue, it’s vital to assess the impact that foreign workers have on the technology industry and the U.S. economy as a whole.