H-1B visa immigration program erodes wages, curbs hiring: study

H-1B visa immigration program erodes wages, curbs hiring: study

By George Avalos March 14, 2017 at 11:50 AM

The H-1B visa immigration program has undermined wages and eroded job growth — yet bolstered corporate profits — according to a new report by a closely watched research group of economists.

The study by the widely respected National Bureau of Economic Research looked at the impact of foreigners who entered the “high-skill workforce” during the 1990s.

The main takeaways from the study: Immigration has caused wages to be lower and hiring to be reduced for U.S. tech workers than would otherwise have been the case.

Without immigration, wages would have been as much as 5 percent higher for tech workers, and up to 11 percent more tech jobs would have been created, according to the study, which was conducted by two academics from the University of Michigan economics department and an academic from UC San Diego.

One possible caveat regarding the study, however, is that it analyzed a period from 1994 through 2001. That time frame also coincided with the dot-com era boom, a time when demand for technology workers surged.

“In the absence of immigration, wages for U.S. computer scientists would have been 2.6 percent to 5.1 percent higher and employment in computer science for U.S. workers would have been 6.1 percent to 10.8 percent higher in 2001,” wrote University of Michigan professors John Bound and Nicolas Morales and UC San Diego professor Gaurav Khanna.

Yet while tech workers in the United States felt those effects, consumers and technology titans harvested a bumper crop of rewards, the researchers stated in their study, which was completed in February 2017.

“Immigration lowered prices and raised the output of I.T. goods by between 1.9 percent and 2.5 percent, thus benefiting consumers,” the NBER study determined. “Finally, firms in the I.T. sector also earned substantially higher profits due to immigration.”

The researchers also noted that the rising profits tends to put tech executives and digital leaders in the camp that urges more skilled immigration

“High-skill immigrant labor raises I.T. sector profits,” the professors wrote. “It is then no surprise that Bill Gates and other I.T. executives lobby in favor of increasing quotas for high-skill immigrants.”


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