Previously unreported data: the U.S. lost 45,000 college grads to Canada’s high-skill visa from 2017 to 2021

2023/03/16 Leave a comment

Of note, Canadian advantage in play:

Despite having some of the best universities and training programs in the world, the U.S. struggles to retain high-value international students, thanks to our outdated immigration system. Canada has historically been one of our competitors for talent, and new data obtained by the Niskanen Center demonstrates just how stark this problem has become. To remain competitive in the global market, the U.S. must find ways to prevent the continued loss of domestically-trained talent.

The data demonstrate that Canada is eager to profit from the valuable training of our graduates and can do so by taking advantage of the systemic shortcomings that often render our labor market inaccessible to these foreign students.

Niskanen recently obtained previously unreported (and still unpublished) data from the Canadian immigration office’s Statistical Reporting Group detailing top Express Entry applicants’ educational and citizenship backgrounds. Express Entry is Canada’s recruitment arm for skilled talent worldwide. Recipients can pursue permanent residence in Canada without requirements for employer sponsorship or secured employment. Express Entry applicants must demonstrate their language skills, educational credentials, and work experience and are then ranked as a part of Canada’s point-based system. Only the top applicants are invited to seek permanent residence.

According to the data we obtained, between 2017 and 2021, approximately 45,000 invitations went to skilled workers who received their postsecondary education in the U.S–88 percent of whom were not U.S. citizens.

This is especially disconcerting because many international students at American universities do want to work in the U.S. after graduation. What’s more,the U.S. desperately needs these students. Still, our outdated immigration system makes employing them unnecessarily difficult.

One of the most common pathways for international students to remain in the United States is Optional Practical Training, followed by a bid in the H-1B lottery. Unlike Express Entry, success in the H-1B lottery is not based on merit, but on a random selection of petitions chosen for adjudication. The most recent rate of selection was about one in four, meaning that nearly 75 percent of H-1B hopefuls never had the chance to put their credentials before U.S. immigration officials.

This lottery and the overall capacity restraints of the immigration system put the U.S. at a distinct disadvantage. We invest in educating and training thousands of international students every year, often with incredibly valuable skill sets. But then we don’t offer opportunities for these skilled individuals to stay and contribute to our economy after graduation–despite the high demand from employers. This amounts to our loss, and Canada’s gain.

Since 2013, Canadian companies have regularly run billboard advertisements in Silicon Valley to target foreign talent frustrated by the American immigration system’s limitations. These billboards are straightforward: “H-1B Problems? Pivot to Canada.”  Though they target individuals, companies are also responding.

According to Envoy Global’s 2022 Immigration Trends Report respondents, 71 percent of American employers are pursuing global strategies to retain talent that couldn’t obtain U.S. work authorization, with Canada being the top destination for employee relocation.

This is a win-win scenario for Canada. Immigrants arrive ready to work with highly sought-after skills, contribute to the Canadian economy in tax and consumption, and fill — or create — jobs that can stimulate further economic growth.

While international students make up less than 5 percent of all higher education enrollees in the U.S., they are vastly overrepresented in our most crucial fields. For instance, in electrical engineering, petroleum engineering, and computer sciencegraduate programs, approximately 80 percent of students are foreign-born. When the U.S. fails to provide ample and accessible visa pathways for these students after graduation, they take their valuable skills elsewhere–to our competitors’ benefit, and to our detriment.

This new data spells out in stark numbers what we had already reasonably deduced: that the U.S. is in the midst of a brain drain, and Canada is reaping the benefits as talent moves elsewhere to put their critical skills into practice. The U.S. must respond promptly by providing ample and viable visa pathways that can protect the educational investments made in these students.

Source: Previously unreported data: the U.S. lost 45,000 college grads to Canada’s high-skill visa from 2017 to 2021

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US Visa Hurdles Push More Companies to Relocate Foreign Talent

2023/03/13 Leave a comment

Note Canadian angle:

US employers are increasingly relocating employees abroad to hold onto key talent in the face of restrictive quotas on high-skilled foreign workers. 

Ninety-three percent of companies that responded to a survey of workplace immigration trends say they expect this year to turn to offshoring or nearshoring talent—transferring employees overseas or to a nearby country—because of a combination of immigration restrictions and labor demands. 

Canada is the top destination to relocate foreign workers, with 62% of responding companies sending workers there, according to the survey produced by immigration services firm Envoy Global Inc. It was followed by Mexico and the United Kingdom (48%) and Germany (31%). 

In most cases, the move is the result of challenges securing a work visa. More than eight out of 10 employers lost a foreign employee in the past year because they were unable to secure an H-1B or other employment-based visa. 

“There’s a continued frustration with the finite viability and challenge of securing a visa,” said Envoy Global President and CEO Dick Burke. “They’re pursuing the next best alternative, which is overseas.” 

The online registration period for H-1B specialty occupation visas opened last week, a preliminary step before US Citizenship and Immigration Services holds a lottery for the 85,000 visas available for fiscal year 2024. 

Demand for foreign workers with skills in science, technology, mathematics, and engineering has continued to grow across the economy, far outstripping that annual cap. 

At the same time, many companies are becoming more comfortable with hybrid and remote work to keep top talent. 

“The confluence of those factors”—immigration difficulties and the rise of telework—drove the increase in offshoring plans, Burke said.

O Canada

Recent international graduates with STEM degrees from US colleges and universities can work for up to three years on F-1 student visas under a program called Optional Practical Training. The program allows those graduates to remain and work in the US while trying their hands at getting an H-1B.

When an early-career worker has run out of immigration options after multiple attempts at the H-1B visa lottery, relocating them to Canada has become a top fallback option for employers, said Jennifer Behm, an attorney at Berardi Immigration Law.

Such nearshoring was already a “no brainer” for large, multinational corporations, but it’s drawing increasing interest from smaller and midsize firms as well. 

“When we’ve seen new interest, it has been the medium size firms, not the enormous conglomerates or multinationals,” Behm said. “We’ve successfully made it work for companies who only have US operations.” 

Canada is attractive because of its close proximity and similar time zones. It also offers a more worker-friendly immigration system, including immediate work permits for spouses and a quicker pathway to permanent residency, she said.

Relocation Services Industry

There hasn’t been a massive shift toward relocating workers abroad, but companies that do so are finding it easier, said Davis Bae, co-chair of the immigration practice group at Fisher & Phillips LLP. 

“Are people more interested in it now? Only because there are more resources,” he said. 

Smaller companies without operations abroad have been turning to professional employer organizations (PEOs) for human resource and compliance services when they face losing a skilled foreign worker. The PEO serves as the employer of record in a country like Canada so companies don’t have to establish their own offices outside of the US. 

Under this arrangement, paying to relocate a worker to Toronto or Vancouver costs a fraction of what it would cost to replace them with a new employee, said Marc Pavlopoulos, the founder and CEO of PEO Syndesus Canada Inc.

The company employs about 200 workers for US companies in Canada, roughly 90% of whom relocated after losing out on the H-1B lottery. Pavlopoulos works with smaller US-based tech companies that are seeking to grow, while also working toward a Canadian goal of adding 500,000 immigrants per year by 2025. 

“The Canadian Dream is a good one,” he said. “You get to keep your cool job and you’re on your way to getting a Canadian passport.”

Source: US Visa Hurdles Push More Companies to Relocate Foreign Talent

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ICYMI: Deep job cuts in Silicon Valley could bring tech workers back to Canada

2023/01/03 Leave a comment

We will see but certainly presents an opportunity:

A northern Silicon Valley success story has placed Canada in the midst of the sudden plunge in fortune for the tech sector, and the hundreds of thousands of Canadians whose skill and ambition made them coveted engineers, programmers and leaders.

More than 150,000 tech workers have been laid off this year, according to an online tally. The cuts have been wide and deep, slicing across companies, global offices and nationalities – Canadians included.

But could their losses be Canada’s gain? It’s a potentially critical question for the entrepreneurs and visionaries who see a moment for this country to find serendipity in grim times.

The dramatic change in Silicon Valley’s fortunes has created “opportunity for Canada to reclaim some of its talent,” said Jennifer Holmstrom, a Canadian who leads talent and recruitment for GGV Capital, a global venture capital firm.

For every job lost in California – or Seattle or Austin, Tex. – there is a chance “for Canadians to come back and for global talent to move here,” said Dan Burgar, co-founder of Frontier Collective, a Vancouver tech industry promotion group. In Canada, “we’ll start to see startups being actually being able to scoop up some of this talent.”

That, at least, is the dream for tech companies north of the border.

But the rounds of layoffs also stand to reaffirm the long-standing struggles for Canada’s tech industry in luring the country’s best and brightest. While Canadian tech has become an increasingly attractive option for foreign workers – a trend that has accelerated this year as U.S. layoffs take hold – for many Canadians, Silicon Valley remains a land of possibility whose glitter has only slightly dimmed in recent months.

When Trevor Lai left Toronto for a job in Seattle with Meta Platforms Inc., his salary quadrupled. Moving to the U.S. has come with its share of troubles. His fiancée has not been able to secure a work permit there. His own status has become tenuous, too, after he was laid off in early November, when Meta shed 13 per cent of its work force. “If I don’t find a job I will get kicked out of the U.S.,” he says.

But his first priority is to remain in the U.S. “Just because of the money,” he said. Even had he been able to transfer his job at Facebook to Toronto, he calculated that his income would have fallen by 40 per cent. “I’ve worked in several companies in Toronto,” he said. “The people there are amazing. Everything is awesome – except for the pay.”

At the same time, the tech layoffs have come during a year that has already seen a surge in skilled immigrants coming to Canada, and there are signs that job losses in the U.S. may accelerate movements north.

The 4,882 applications for immigration to Canada under the Global Talent Stream program from January to October of this year are up nearly 70 per cent over the total for last year – and a more than 10-fold increase over 2017, according to statistics provided to The Globe and Mail by Immigration, Refugees and Citizenship Canada. The Global Talent Stream is open to people working in innovation-related companies, with a particular focus on tech workers, including computer and software engineers, information systems analysts, programmers and video-game designers.

Applications for Canadian work permits by Indian citizens in the first 10 months of this year are also up 40 per cent over last year, and more than triple the number from five years ago.

Indians hold nearly three-quarters of the H-1B visas granted by the U.S., a temporary work permit for specialized talent. They have been among the groups most seriously affected by tech layoffs, since H-1B visas are tied to employment. Those unable to find new jobs must leave the U.S. within 60 days.

Over the past decade of frenzied tech hiring and acute worker shortages, H-1B visa-holders could treat the threat of expulsion as theoretical. Tech layoffs have made that possibility unnervingly tangible.

Canada can be an appealing alternative. Major U.S. tech firms have already opened offices in Canadian cities, which have the added benefit of sharing time zones with their U.S. counterparts.

Last year, Canada counted more tech workers than California; the tech worker population in the Toronto-Waterloo corridor may soon eclipse that of the San Francisco Bay area. “If it hasn’t already happened, it will happen within the next 12 months,” said Chris Albinson, president of Communitech, the Kitchener, Ont.-based innovation hub.

“Canada is actually set up really well to be the largest innovation hub on the planet right now. What’s happening now in terms of the movement of tech workers out of the U.S. is going to do nothing but accelerate that benefit for Canada.”

In Silicon Valley, some have already prepared for this moment. The pandemic and Donald Trump’s presidency created enough fear that many Indian tech workers in Silicon Valley began filing immigration applications to Canada, said Sophie Alcorn, an immigration lawyer in the region. Today, “many have that as a backup option.” She estimates that between 5,000 and 15,000 H-1B visa holders have lost work in the last two months.

For many of those unable to find new jobs in the U.S., “if they can find a way to legally come to Canada, they would love that,” she said.

It’s not only those suddenly without work. MobSquad, which brings tech workers to Canada from the U.S. and elsewhere, has been hearing from software engineers who are “actually the ones that didn’t get laid off, that there’s interest in considering hopping to Canada,” said founder and chief executive Irfhan Rawji.

“We think it is going to create another pretty dramatic opportunity for the growth of our business, just like COVID did.”

It’s not clear how much that will address one of the biggest needs in Canada’s tech sector: a shortage of what Ray Newal, chief executive of The C100, a Canadian tech diaspora organization, calls “people who understand what ‘great’ looks like.” Those with experience working in and growing companies with $100-million and more in annual revenue are the people who can help build startups into global successes. Tech layoffs provide a new opening to recruit such people into smaller Canadian companies.

“Hopefully we’re going to see an opportunity to build more Shopify’s,” he said. To do that, however, will mean countering what he calls a “bifurcation of ambition,” where Canadians looking to do big things have traditionally looked outside the country.

“They don’t feel that their ambition can be met here,” he said. Reversing that is not “something we have figured out how to do well enough yet.”

Anyone leaving the U.S. has options that extend far beyond Canada, particularly with rise of digital nomadism. People are “going to want to work from Mexico, from Barbados, from Bermuda,” said Hongwei Liu, founder of Mappedin, a Waterloo-based company that maps indoor spaces. “If you can take your laptop and work from anywhere, why are you in Ontario?”

That question is a fundamental one not just for tech companies, but for Canada as a country. “We believe the biggest indicator of long-term success in the tech ecosystem is going to be talent,” said Jeff Larsen, the Atlantic Canada site lead for Creative Destruction Lab, which helps to develop seed-stage companies.

Mr. Larsen believes the question of how to attract talent is often approached wrongly. “It’s really creating the kind of community and city or region that people want to live in,” he said. Improving access to family doctors and transit may be more important than other measures.

Yet Canada has also seen enough tech success to make some ex-pat Canadians reconsider, especially as they weigh the political upheaval that has become part of life in places like the U.S. When Morley Ivers left Canada more than a decade ago, he found himself immediately at home as a tech entrepreneur in the U.S., where he became a citizen. “Being a founder was sort of recognized as someone who was living what people deemed was the American dream,” he said.

But, he said, “society inside of America has become so polarized that for me as a Canadian, quite frankly it became too much to bear.” He recently moved back to Toronto to create Cookin, a food delivery service for homemade meals. “I realized that the best place in the world for me to build in 2022 was Canada,” Mr. Ivers said. Toronto boasts not just cultural diversity, but “unbelievable tech talent – and it’s a fraction of the price.”

Others are leaving the U.S. in search of stability, including Indian citizens on H-1B visas who can wait decades to secure a green card. “I would call living on an H-1B in the U.S. like living on the edge,” said Syed Naqi, a software developer and project manager originally from New Delhi. He knows people who had to sell everything they owned – cars and houses included – after their status expired “and then rush back to India.”

When Mr. Naqi’s own H-1B visa was set to expire, MobSquad helped him move to Nova Scotia.

Within 18 months, he received permanent resident status in Canada. He now lives in Cole Harbour with his wife and two children. He describes his new community as warm and welcoming. He bought a house, and his family became fast friends with their next-door neighbours from Lebanon. His kids quickly adapted to a school system familiar after their time in the U.S.

“We like it here,” Mr. Naqi said. “Much better than in the U.S.”

Source: Deep job cuts in Silicon Valley could bring tech workers back to Canada

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Indian tech workers in Silicon Valley protest immigration discrimination

2022/12/20 Leave a comment

Of note, another potential advantage for Canada;

With thousands of Central America refugees converging on the U.S. southern border, the issue of immigration is heating up this week.  It’s a fight that usually centers on a fear of Americans losing their jobs. But there are some immigrants who were invited here specifically because their skills are needed and they say even they are being let down by the system.

The thirty or so people who marched in San Jose Sunday were not immigrants demanding to enter this country. They’ve already been here — some for decades. They were recruited from India to work in the Silicon Valley tech industry using H1B visas.  Using H1Bs, employers can legally hire foreign workers who have specific skills and, once here, they usually qualify for a permanent green card within a year or two.  Unless, that is, they come from India…

“We all have applied for a green card and it has been approved.  Only thing is, we need to wait 150 years to get a green card,” said Akhilesh Malavalli.  “A hundred fifty years!  I’ll be dead.  I’ll be dead by the time we see a green card.”

There is a cap on the number of skills-based green cards that can be issued to any one country of origin and there are so many workers from India, getting one has become practically impossible.

Sunday, the workers protested in front of the San Jose home of congresswoman Zoe Lofgren, demanding that she fulfill a promise to bring a bill to the House floor for a vote.  HR 3648 would remove national origin as a consideration for getting a skilled-worker green card.

Source: Indian tech workers in Silicon Valley protest immigration discrimination

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H-1B Visa Denial Rates Plunge After Trump Immigration Policies End

2022/01/14 Leave a comment

Not surprising. Will see if this reverses some of the preference of some high skilled immigrants for Canada that emerged during the Trump years:

H-1B denial rates have returned to pre-Trump levels after court decisions and a legal settlement ended the Trump administration’s restrictive policies, according to a new report. The changes started in the fourth quarter of FY 2020, while Donald Trump was still president, following a legal settlement with the business group ITServe Alliance and judges declaring the Trump administration’s policies unlawful. The lower denial rates continued through FY 2021 because the Biden administration abided by the legal settlement and did not introduce new restrictions.

“The denial rate for new H-1B petitions for initial employment in FY 2021 dropped to 4%, far lower than the denial rate of 24% in FY 2018, 21% in FY 2019 and 13% in FY 2020,” according to a new report from the National Foundation for American Policy (NFAP). “The Trump administration managed to carry out what judges determined to be unlawful policies for nearly four years, and the policies imposed significant costs on employers, visa holders and the U.S. economy, likely contributing to more work and talent moving to other countries.”

H-1B petitions for “initial” employment are for new employment, normally a case for companies that counts against the H-1B annual limit. The FY 2020 denial rate would have been higher if not for the legal settlement. Court rulings also stopped U.S. Citizenship and Immigration Services (USCIS) from continuing to impose new restrictions on who qualified for an H-1B specialty occupation.

The low H-1B denial rates in FY 2021 show the Trump administration’s anti-immigration approach was an aberration. “NFAP found the denial rates in FY 2021 and FY 2015 to be similar for employers, meaning the Trump years were an aberration due to imposing restrictive policies that courts found to be unlawful,” according to the report. “For several companies, particularly those that provide information technology (IT) services or other business services to U.S. companies, the denial rate for H-1B petitions for initial employment was far lower in FY 2021 than in FY 2020.”

H-1B temporary visas typically are the only practical way for a high-skilled foreign national, including an international student, to work long-term in the United States and have an opportunity to become an employment-based immigrant and a U.S. citizen. Many founders of billion-dollar companies and individuals who created the vaccines and delivered medical care that has saved the lives of Americans during the pandemic have used H-1B visas and employment-based green cards, notes NFAP.

Among the findings in the NFAP analysis:

–     “The denial rate for H-1B petitions for continuing employment was 2% in FY 2021, much lower than the 12% denial rate in FY 2018 and FY 2019 and the lowest level since data on H-1B denial rates became available. H-1B petitions for ‘continuing’ employment are usually extensions for existing employees at the same company or an H-1B visa holder changing to a new employer. The denial rate for H-1B petitions for continuing employment was 7% in FY 2020 but would have been higher if not for the impact in the fourth quarter of the court decisions and the legal settlement. In recent history, the 7% denial rate was still high compared to the 3% denial rate for H-1B petitions for continuing employment each year between FY 2011 and FY 2015.

–     “Much of the increase in denials for continuing employment during the Trump administration was due to an October 2017 memo that instructed adjudicators to no longer ‘give deference to the findings of a previously approved petition.’ Many extensions of H-1B status were reviewed under a new, more restrictive standard based on policies that judges later determined to be unlawful. Employers and attorneys have credited USCIS Director Ur Jaddou and the Biden administration for rescinding the October 2017 memo.

–     Amazon had the most approved H-1B petitions for initial employment in FY 2021 with 6,182. Amazon also had the most new H-1B petitions approved in FY 2020. Infosys had the second most H-1B petitions in FY 2021 approved for initial employment (5,256), followed by TCS (3,063), Wipro (2,121) Cognizant (1,481), Google (1,453), IBM (1,402), HCL America (1,299) and Microsoft (1,240).

–     “Processing issues likely inflated the number of approved H-1B petitions for the top employers. In the USCIS data, H-1B petitions are counted in the fiscal year they are approved, not in the cap year the H-1B visa holder begins to work. NFAP determined approximately 18,000 more petitions were approved for initial employment in FY 2021 compared to FY 2020, possibly due to USCIS processing issues in FY 2020 caused by the pandemic and the higher denial rate in 2020. Another caveat to the numbers is that, according to attorneys, in FY 2019 and FY 2020 during the Trump administration, USCIS held or delayed H-1B applications for many IT services companies, which would have inflated the number of approved H-1B petitions for those companies in FY 2021.

–     “The top employers of approved H-1B petitions in FY 2021 were also among the fastest-growing employers of U.S. workers, providing evidence that companies that employ H-1B visa holders also seek out and employ U.S. workers in significant numbers. The information on the significant hiring of U.S. workers by employers of H-1B professionals helps demonstrate the fallacies of the zero-sum argument about high-skilled foreign nationals ‘taking’ American jobs, particularly since economists have found hiring high-skilled personnel complements other high-skilled jobs as well as other types of employment at a company and in the economy.

–     “At U.S. universities, only approximately 25% of the full-time graduate students in electrical engineering and computer and information sciences are U.S. students.”

Source: H-1B Visa Denial Rates Plunge After Trump Immigration Policies End

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H-1B Visa Rule About To Die For Good

2021/12/13 Leave a comment

Of note. May reduce the relative attractiveness of Canada:

An H-1B visa regulation that would make it less likely international students can work in the United States appears ready to die for good. Critics asked why the Biden administration was defending an immigration rule championed by Trump adviser Stephen Miller. The answer is the Biden administration is no longer defending the rule.

“Our plaintiffs are thrilled with the government’s apparent, yet belated, decision to no longer defend the H-1B Lottery Rule,” said Jesse Bless, director of litigation at the American Immigration Lawyers Association (AILA), in an interview. “While we wish that the government had not waited until we had completed briefing on cross-motions for summary judgment, we are fully committed to settlement negotiations, which will hopefully ensure that our plaintiffs receive all the relief to which they are entitled.” 

The case is Humane Society of NY, et al. v. Alejandro Mayorkas, et al. “Following the completion of briefing in this case, the parties entered into settlement negotiations,” according to an unopposed motion filed in the case on December 6, 2021. “There is now a good-faith reason to believe that the parties will reach an agreement in the near future that will fully resolve this matter. However, the parties need additional time to confer and fully resolve the issues presented. In light of the current state of play, plaintiffs hereby move for a sixty-day extension of time to file the Joint Appendix of the Administrative Record which is due on December 6, 2021. Plaintiffs conferred with opposing counsel and they expressed support for the requested extension. The parties anticipate that sixty days will allow the parties to exhaust the possibility of resolving this case without further involvement of the court and move for a dismissal of this matter.”

Plaintiffs’ attorneys in the Humane Society case, in addition to Bless, are Greg Siskind (Siskind Susser), Jeff D. Joseph (Joseph & Hall) and Charles H. Kuck (Kuck Baxter Immigration).

Background: On January 8, 2021, the Trump administration published a regulation as “final” to end the H-1B visa lottery and replace it with a system that awards H-1B petitions by highest to lowest salary. U.S. Citizenship and Immigration Services (USCIS) uses the lottery when companies file more H-1B applications than the annual limit of 85,000 (65,000 plus a 20,000-exemption for advance degree holders from U.S. universities). In 2021, USCIS received more than 300,000 H-1B registrations for FY 2022.MORE FROMFORBES ADVISORBest Travel Insurance CompaniesByAmy DaniseEditorBest Covid-19 Travel Insurance PlansByAmy DaniseEditor

H-1B petitions are essential because they typically represent the only practical way foreign nationals, including international students, can work long-term in the United States.

The H-1B rule would be bad news for international students. “The National Foundation for American Policy (NFAP) found that an international student may be 54% more likely to get an H-1B petition under the current H-1B lottery system than under the Trump administration’s regulation that would end the H-1B lottery,” according to an NFAP analysis of cases of recent international students and filings for H-1B petitions. “The data demonstrate the new regulation would have a significant negative effect on the ability of international students to gain an H-1B petition.”

In its September 20, 2021, motion for summary judgment in Humane Society of NY, et al. v. Alejandro Mayorkas, et al., plaintiffs cited NFAP research on the primary reason why the rule would prevent most international students from gaining H-1B status: “Initial registrations for these freshly graduated H-1B workers are generally assigned a Level I wage.” 

In other words, employers would naturally offer individuals with less experience in the U.S. labor market lower salaries (Level 1 under the Department of Labor wage level system) than more experienced professionals. Adopting the rule would lead the United States to establish a system—unlike any of its competitors for talent in other countries—that favors the most senior foreign nationals over young, promising talent, particularly recent graduates of U.S. universities.

Difficulty in gaining H-1B status and permanent residence contributed to an increase in Indian students at Canadian universities from 76,075 to over 172,000 between 2016 and 2018. At the same time, at U.S. universities, Indian graduate students in engineering and computer science fell 25%. The evidence indicates America is losing talent because it is much easier to work after graduation and gain permanent residence in Canada and other countries—and the Trump administration’s H-1B regulation would exacerbate this problem. 

In its complaint (May 17, 2021) and motion for summary judgment, plaintiffs argued the regulation is illegal because Chad Wolf was not properly serving as acting secretary of Homeland Security when the rule was issued. Also, according to the plaintiffs, “This final rule unlawfully makes the H-1B nonimmigrant visa selection process dependent on wage level and unlawfully gives priority for lottery selection to those H-1B applicants who are paid the highest wages.”

In a defendants’ reply in further support of their cross-motion for summary judgment, filed on November 22, 2021, the Biden administration argued, “The final rule was promulgated by an authorized official, the final rule comports with the INA [Immigration and Nationality Act]” and “DHS [Department of Homeland Security] responded sufficiently to the public comments.”

The U.S. Chamber of Commerce Lawsuit: Earlier in the year, the Biden administration lost a different lawsuit over the H-1B rule. In his order on September 15, 2021, issued in Chamber of Commerce v. DHS, Judge Jeffrey S. White agreed with a critical legal argument made by the plaintiffs. 

“Plaintiffs argue the Final Rule must be set aside because Mr. Wolf was not lawfully appointed as Acting Secretary at the time DHS promulgated the rule,” Judge White wrote. “In ILRC, the Court concluded the plaintiffs were likely to succeed on the merits of their claim that Mr. Wolf’s appointment was not lawful. At that time, two other district courts had considered and rejected DHS’s arguments, as had the Government Accountability Office (“GAO”). . . . Since then, a number of other courts also have determined that Mr. McAleenan and Mr. Wolf not acting with lawful authority. . . . Because he was not lawfully appointed, Mr. McAleenan’s subsequent attempts to amend the order of succession and to elevate Mr. Wolf to Acting Secretary also were not valid.”

Judge White ruled against the regulation solely on the DHS appointment issue and did not address other arguments raised by plaintiffs. Paul Hughes of McDermott Will & Emery, representing the plaintiffs (the Chamber of Commerce and others), argued the H-1B rule also violated current law. “First, the Lottery Rule is flatly inconsistent with the text of the Immigration and Nationality Act,” according to the plaintiffs. “The statute provides unambiguously that H-1B visas ‘shall be issued . . . in the order in which petitions are filed for such visas.’ Yet the Rule instead unabashedly institutes ‘ranking and selection based on wage levels,’ such that the relatively highest-paid noncitizens are issued visas first, likely leaving none for those at lower wage levels. Agencies are powerless to thus ‘rewrite clear statutory terms.’”

Department of Justice lawyers representing the Department of Homeland Security filed an unopposed motion for dismissal in the Chamber of Commerce case on November 30, 2021. That action foreshadowed the Biden administration’s willingness to bring the Humane Society case to a close as well.

Now that the litigation on the H-1B rule appears to be finished, one question remains: Will the Biden administration allow the regulation to stay dead, or will it issue a new regulation that critics believe embraces Stephen Miller’s vision of business immigration?

An H-1B visa regulation that would make it less likely international students can work in the United States appears ready to die for good. Critics asked why the Biden administration was defending an immigration rule championed by Trump adviser Stephen Miller. The answer is the Biden administration is no longer defending the rule.

“Our plaintiffs are thrilled with the government’s apparent, yet belated, decision to no longer defend the H-1B Lottery Rule,” said Jesse Bless, director of litigation at the American Immigration Lawyers Association (AILA), in an interview. “While we wish that the government had not waited until we had completed briefing on cross-motions for summary judgment, we are fully committed to settlement negotiations, which will hopefully ensure that our plaintiffs receive all the relief to which they are entitled.” 

The case is Humane Society of NY, et al. v. Alejandro Mayorkas, et al. “Following the completion of briefing in this case, the parties entered into settlement negotiations,” according to an unopposed motion filed in the case on December 6, 2021. “There is now a good-faith reason to believe that the parties will reach an agreement in the near future that will fully resolve this matter. However, the parties need additional time to confer and fully resolve the issues presented. In light of the current state of play, plaintiffs hereby move for a sixty-day extension of time to file the Joint Appendix of the Administrative Record which is due on December 6, 2021. Plaintiffs conferred with opposing counsel and they expressed support for the requested extension. The parties anticipate that sixty days will allow the parties to exhaust the possibility of resolving this case without further involvement of the court and move for a dismissal of this matter.”

Background: On January 8, 2021, the Trump administration published a regulation as “final” to end the H-1B visa lottery and replace it with a system that awards H-1B petitions by highest to lowest salary. U.S. Citizenship and Immigration Services (USCIS) uses the lottery when companies file more H-1B applications than the annual limit of 85,000 (65,000 plus a 20,000-exemption for advance degree holders from U.S. universities). In 2021, USCIS received more than 300,000 H-1B registrations for FY 2022.MORE FROMFORBES ADVISORBest Travel Insurance CompaniesByAmy DaniseEditorBest Covid-19 Travel Insurance PlansByAmy DaniseEditor

H-1B petitions are essential because they typically represent the only practical way foreign nationals, including international students, can work long-term in the United States.

The H-1B rule would be bad news for international students. “The National Foundation for American Policy (NFAP) found that an international student may be 54% more likely to get an H-1B petition under the current H-1B lottery system than under the Trump administration’s regulation that would end the H-1B lottery,” according to an NFAP analysis of cases of recent international students and filings for H-1B petitions. “The data demonstrate the new regulation would have a significant negative effect on the ability of international students to gain an H-1B petition.”

In its September 20, 2021, motion for summary judgment in Humane Society of NY, et al. v. Alejandro Mayorkas, et al., plaintiffs cited NFAP research on the primary reason why the rule would prevent most international students from gaining H-1B status: “Initial registrations for these freshly graduated H-1B workers are generally assigned a Level I wage.” 

In other words, employers would naturally offer individuals with less experience in the U.S. labor market lower salaries (Level 1 under the Department of Labor wage level system) than more experienced professionals. Adopting the rule would lead the United States to establish a system—unlike any of its competitors for talent in other countries—that favors the most senior foreign nationals over young, promising talent, particularly recent graduates of U.S. universities.

Difficulty in gaining H-1B status and permanent residence contributed to an increase in Indian students at Canadian universities from 76,075 to over 172,000 between 2016 and 2018. At the same time, at U.S. universities, Indian graduate students in engineering and computer science fell 25%. The evidence indicates America is losing talent because it is much easier to work after graduation and gain permanent residence in Canada and other countries—and the Trump administration’s H-1B regulation would exacerbate this problem. 

In its complaint (May 17, 2021) and motion for summary judgment, plaintiffs argued the regulation is illegal because Chad Wolf was not properly serving as acting secretary of Homeland Security when the rule was issued. Also, according to the plaintiffs, “This final rule unlawfully makes the H-1B nonimmigrant visa selection process dependent on wage level and unlawfully gives priority for lottery selection to those H-1B applicants who are paid the highest wages.”

In a defendants’ reply in further support of their cross-motion for summary judgment, filed on November 22, 2021, the Biden administration argued, “The final rule was promulgated by an authorized official, the final rule comports with the INA [Immigration and Nationality Act]” and “DHS [Department of Homeland Security] responded sufficiently to the public comments.”

The U.S. Chamber of Commerce Lawsuit: Earlier in the year, the Biden administration lost a different lawsuit over the H-1B rule. In his order on September 15, 2021, issued in Chamber of Commerce v. DHS, Judge Jeffrey S. White agreed with a critical legal argument made by the plaintiffs. 

“Plaintiffs argue the Final Rule must be set aside because Mr. Wolf was not lawfully appointed as Acting Secretary at the time DHS promulgated the rule,” Judge White wrote. “In ILRC, the Court concluded the plaintiffs were likely to succeed on the merits of their claim that Mr. Wolf’s appointment was not lawful. At that time, two other district courts had considered and rejected DHS’s arguments, as had the Government Accountability Office (“GAO”). . . . Since then, a number of other courts also have determined that Mr. McAleenan and Mr. Wolf not acting with lawful authority. . . . Because he was not lawfully appointed, Mr. McAleenan’s subsequent attempts to amend the order of succession and to elevate Mr. Wolf to Acting Secretary also were not valid.”

Judge White ruled against the regulation solely on the DHS appointment issue and did not address other arguments raised by plaintiffs. Paul Hughes of McDermott Will & Emery, representing the plaintiffs (the Chamber of Commerce and others), argued the H-1B rule also violated current law. “First, the Lottery Rule is flatly inconsistent with the text of the Immigration and Nationality Act,” according to the plaintiffs. “The statute provides unambiguously that H-1B visas ‘shall be issued . . . in the order in which petitions are filed for such visas.’ Yet the Rule instead unabashedly institutes ‘ranking and selection based on wage levels,’ such that the relatively highest-paid noncitizens are issued visas first, likely leaving none for those at lower wage levels. Agencies are powerless to thus ‘rewrite clear statutory terms.’”

Department of Justice lawyers representing the Department of Homeland Security filed an unopposed motion for dismissal in the Chamber of Commerce case on November 30, 2021. That action foreshadowed the Biden administration’s willingness to bring the Humane Society case to a close as well.

Now that the litigation on the H-1B rule appears to be finished, one question remains: Will the Biden administration allow the regulation to stay dead, or will it issue a new regulation that critics believe embraces Stephen Miller’s vision of business immigration?

Source: https://e.email.forbes.com/c2/869:5df3a796a806e2781760c8d7:rm202112111300:5e4bc7f55b099ce02faa6b40:1/56c3e6d7?jwtH=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9&jwtP=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&jwtS=Q41VLkxtpbyTDTU7aGedDln-Agp94UQVb-c0_tBKuh0

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New Increase In H-1B Visa Fees Further Shatters ‘Cheap Labor’ Myth

2021/11/09 Leave a comment

Reality vs the rhetoric:

The mistaken premise of nearly all restrictions on high-skilled immigration is that foreign-born scientists and engineers offer no value to America or U.S. companies except for a willingness to work for less money, note analysts. That is the premise even though the key people behind the vaccines that saved the lives of many Americans from Covid-19 are former international students, H-1B visa holders and employment-based immigrants. Even some members of Congress sympathetic to refugees and individuals without legal status imply that it is a gift to business to allow companies to hire high-skilled foreign nationals and sponsor them for permanent residence.

In reality, coming to America as an international student and gaining H-1B status, or being hired directly on an H-1B visa, is just another way to pursue the American Dream. For many, it is a necessary step under the U.S. immigration system for an opportunity to stay permanently and start a career and family in America. A new House bill will make it more expensive for employers to file petitions for those pursuing those dreams.

Critics of H-1B visa holders do not mention the high fees required to file an H-1B petition or the large number of job openings in computer occupations. If the House reconciliation bill becomes law, filing an H-1B petition will become more expensive, further shattering what businesses and attorneys call the myth of H-1B visa holders as “cheap labor.”

The mistaken premise of nearly all restrictions on high-skilled immigration is that foreign-born scientists and engineers offer no value to America or U.S. companies except for a willingness to work for less money, note analysts. That is the premise even though the key people behind the vaccines that saved the lives of many Americans from Covid-19 are former international students, H-1B visa holders and employment-based immigrants. Even some members of Congress sympathetic to refugees and individuals without legal status imply that it is a gift to business to allow companies to hire high-skilled foreign nationals and sponsor them for permanent residence.

In reality, coming to America as an international student and gaining H-1B status, or being hired directly on an H-1B visa, is just another way to pursue the American Dream. For many, it is a necessary step under the U.S. immigration system for an opportunity to stay permanently and start a career and family in America. A new House bill will make it more expensive for employers to file petitions for those pursuing those dreams.

The most recent version of the House reconciliation bill, which is expected to be voted on soon, adds a supplemental fee of $500 to existing fees for H-1B petitions. This is one of several fee increases added to the bill after immigration measures passed the House Judiciary Committee in September 2021.

As detailed in a section-by-section summary released with the House bill’s text:

“Section 60004 provides that the fees collected under Subtitle A shall be deposited into the general fund of the Treasury and may not be waived. This section also establishes additional supplemental fees as follows

• $100 for certain family-sponsored immigrant visa petitions (Form I-130) 

• $800 for each employment-based immigrant visa petition (Form I-140) 

• $15,000 for each employment-based fifth preference petition (Form I-526) 

• $19 for each Form I-94/I-94W issued to nonimmigrants who enter the United States 

• $250 for each F-1 and M-1 nonimmigrant student and J-1 exchange visitor to be paid by the approved educational institution or designated exchange visitor program 

• $500 for each application to replace an LPR card that has expired or is expiring 

• $500 for each petition for E, H-1B, L, O, or P status (Form I-129) 

• $500 for each application to change or extend nonimmigrant status (Form I-539) 

• $500 for applications for employment authorization (Form I-765) filed by spouses of certain nonimmigrants, students seeking optional practical training, and applicants for adjustment of status 

• $75 for each approved nonimmigrant visa.”

With the fee increase, a company may spend as much as $31,800 for the cost of filing an initial H-1B petition (for three years) and an extension for an additional three years, based on a National Foundation for American Policy (NFAP) analysis of government fees and attorney costs. For an initial H-1B petition that would include a $460 application fee, the new $500 supplemental fee, attorney fees that range from $1,500 to $4,000, additional legal fees of $2,000 to $4,500 if there is a Request for Evidence, $1,500 for the scholarship and training fee ($750 for smaller employers), a $500 anti-fraud fee (on an initial petition), $2,500 for premium processing (not required but typically necessary), a $4,000 fee for certain employers with a higher proportion of H-1Bs in their workforce and $190 visa application fee.

An employer would need to pay most of the costs cited above again for an extension, while the cost to sponsor an H-1B professional for permanent residence would likely add another $10,000 to $15,000 or more.

Source: https://www.forbes.com/sites/stuartanderson/2021/11/01/new-increase-in-h-1b-visa-fees-further-shatters-cheap-labor-myth/?utm_source=newsletter&utm_medium=email&utm_campaign=follow&cdlcid=5e4bc7f55b099ce02faa6b40&utm_source=newsletter&utm_medium=email&utm_campaign=follow&cdlcid=5e4bc7f55b099ce02faa6b40&sh=5a689b395b15

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2021 Might Be A Decisive Year For H-1B Visas

2021/06/04 Leave a comment

Significant, given possible effects on relative attractiveness of Canada to potential immigrants:

The Trump administration was hostile to high-skilled immigration, but the Biden administration may enact the most enduring policy changes to H-1B visas. And the changes might not be positive for employers. A series of decisions loom on regulations that would affect who can receive H-1B petitions, how much employers must pay H-1B professionals and much more.

The Big Picture: “H-1B visas are important because they generally represent the only practical way for high-skilled foreign nationals, including international students, to work long-term in the United Statesand have the chance to become employment-based immigrants and U.S. citizens,” as discussed in a recent Forbes article. “In short, without H-1B visas, nearly everyone from the founders of billion-dollar companies to the people responsible for the vaccines and medical care saving American lives would never have been in the United States.”

The number of H-1B visas is small for a country the size of the United States. The 85,000 annual H-1B limit—the 65,000 regular cap and the 20,000-exemption for H-1B visa holders with a master’s degree or higher from a U.S. university—comes to 0.05% of the U.S. labor force. Companies are allowed to file for only 85,000 new H-1B petitions in a year, and about two-thirds, or 56,000 a year, are in computer occupations. 

The U.S. job market is strong for individuals who work in computer occupations. The unemployment rate in math and computer occupationswas 2.5% in April 2021, below the 3%, lower than in January 2020 before the pandemic began. 

Today, there are well over 1 million active job vacancy postings in computer occupations, according to a National Foundation for American Policy (NFAP) analysis of Emsi Job Posting Analytics. “There is not a fixed number of jobs, and people with high skills often create more jobs for people with complementary skills,” notes the NFAP analysis. “Still, even if one adopts a zero-sum approach, there are nearly 20 times more job vacancy postings in computer occupations than new H-1B petitions typically used by companies in computer occupations each year. There are also likely many more openings than publicly posted positions.”MORE FOR YOUFederal Judge Hears Arguments Against Trump’s H-1B Visa BanH-1B Visa Denials Continue To Mount For CompaniesCourt Hearing Shows Businesses Could Prevail Against H-1B Visa Rules

With regional Covid-19 bans still in place and many U.S. consulates either not operating or working in a limited capacity, visa backlogs, including for H-1B and L-1 visa, will continue to mount until the State Department commits to new policies. Jeffrey Gorsky, former Chief of the Legal Advisory Opinion section of the Visa Office in the U.S. Department of State, believes the State Department could become more creative with biometric intake, give visa processing a higher priority and conduct more interviews via video. He believes interviews via Zoom would meet the statutory definition of in-person interviews.

Due to Trump administration policies that U.S. courts found unlawful, H-1B denial rates reached 24% for initial employment and 12% for continuing employment in FY 2018 (compared to 6% and 3% in FY 2015). After USCIS agreed to a settlement with the ITServe Alliance that overturned years of restrictive policies, H-1B denial rates returned to pre-Trump levels (after costing companies millions of dollars). The Biden administration may remove some restrictions on H-1B visa holders that prevent them from starting businesses, according to the New York Times.

Still, the H-1B annual limit is low. Employers filed 308,000 H-1B registrations for cap selection for FY 2022, according to USCIS. That means over 72% of H-1B registrations for high-skilled foreign nationals were rejected even before an adjudicator evaluated the application.

The economic literature shows loosening restrictions on H-1B visas would benefit the U.S economy and American workers. A study by economists Giovanni Peri, Kevin Shih, Chad Sparber and Angie Marek Zeitlin found, “The number of jobs for U.S.-born workers in computer-related industries would have grown at least 55% faster between 2005-2006 and 2009-2010, if not for the denial of so many applications in the recent H-1B visa lotteries.”

Britta Glennon, an assistant professor at the Wharton School of Business at the University of Pennsylvania, found in her research that H-1B restrictions push technology-related jobs out of the United States: “[A]ny policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad.”

Some policymakers argue America needs even more restrictive laws and rules to block the hiring of foreign-born scientists and engineers. As discussed below, the Biden administration will soon decide on a series of restrictions that could produce significant changes in H-1B visa policy.

Rule Would Make it Less Likely International Students Will Get H-1B Petitions: Before Donald Trump left office, his administration finalized a regulation that would end the H-1B lottery and replace it with a system that awards H-1B petitions by highest to lowest salary level. Many attorneys consider the regulation to be unlawful, and there are pending lawsuits against the rule. Instead of taking steps to rescind the rule, the Biden administration only delayed the regulation until next year’s H-1B cap selection.

In addition to questions of legality, the rule finalized by the Trump administration would fulfill a long-standing goal of Trump White House adviser Stephen Miller and his allies to make it more difficult for international students to obtain an H-1B petition, which would discourage many students from coming to America in the first place.

International students are disadvantaged under the rule because choosing H-1B petitions by salary level favors individuals with the most experience in the labor market over those with the least experience. “The National Foundation for American Policy found that an international student may be 54% more likely to get an H-1B petition under the current H-1B lottery system than under the Trump administration’s regulation that would end the H-1B lottery,” according to an NFAP analysis of actual cases of recent international students and filings for H-1B petitions. “The data demonstrate the new regulation would have a significant negative effect on the ability of international students to gain an H-1B petition.”

“The law firm Curran, Berger & Kludt provided NFAP with 170 cases of F-1 students with applications for H-1B cap selection for FY 2018, FY 2019, FY 2020 and FY 2021,” according to NFAP. “Under the current system that randomly selects H-1B petitions, 60% of the F-1 students were chosen through the H-1B lottery. However, the law firm provided information on the pay levels (Level 1 through 4) for the students’ H-1B applications, and NFAP found if the new regulation had been in effect, only 39% of the students’ H-1B petitions would have been selected.” Education organizations had warned the Trump administration’s rule would harm international students and make studying in America less attractive.

Rule to Force Employers to Pay H-1B Visa Holders and Employment-Based Green Card Applicants Well Above Market Wages: Under a Department of Labor (DOL) rule, published in the final days of the Trump administration, “employers must pay 23% to 41% higher salaries than under the current system across a range of occupations if they want to employ high-skilled foreign nationals in America,” according to a National Foundation for American Policy (NFAP) analysis. https://embedly.forbes.com/widgets/media.html?src=https%3A%2F%2Fdatawrapper.dwcdn.net%2FUsMsI%2F1%2F&display_name=Datawrapper&url=https%3A%2F%2Fdatawrapper.dwcdn.net%2FUsMsI%2F1%2F&key=3ce26dc7e3454db5820ba084d28b4935&type=text%2Fhtml&schema=dwcdn

The rule would apply to H-1B visa holders and employment-based immigrants and could have a devastating impact on both. H-1B visa holders waiting in the green cards backlog might be forced to leave the country if an employer could not extend their H-1B status at the new, much higher required salary level.

There is no evidence H-1B visa holders and employment-based immigrants as a group are underpaid relative to native-born professionals. Numerous economic studies have found high-skilled foreign nationals, on balance, earn more than their native-born counterparts. For example, Andrew Chamberlain, the chief economist at Glassdoor, found, “Across the 10 cities and roughly 100 jobs we examined, salaries for foreign H-1B workers are about 2.8% higher than comparable U.S. salaries on Glassdoor.” A recent study by Utah State University economist Omid Bagheri finds a larger wage premium for high-skilled foreign nationals.

The Biden administration published a notice of an agency action to delay the DOL rule until November 14, 2022. At the same time, the administration requested information from the public on data sources for calculating the prevailing wage.

Three courts blocked the rule when it was published as “interim final” in October 2020. On January 14, 2021, the Trump administration published a final rule that was only slightly modified from the original and carried the same aim—to price H-1B visa holders and employment-based immigrants out of the U.S. labor market. “The revisions to the rule don’t change the fact that it still fails to do what the law requires—to reflect the actual, prevailing wage for workers in that geographical area doing similar work,” said Kevin Miner, a partner at Fragomen. 

The U.S. Chamber of Commerce and allied business groups and education organizations filed an amended complaint that argues the regulation to end the H-1B lottery is unlawful and continued its lawsuit to end the Department of Labor wage regulation.

New Regulation on Work at Third-Party Sites: “USCIS is still aiming to have a regulation in place by FY23 cap season to restrict use of the H-1B category by outsourcing companies by changing the ‘employer-employee relationship’ definition,” according to Berry Appleman & Leiden. Peter Bendor-Samuel, founder and CEO of Everest Group, argues access to talent is key for competitiveness as information technology services companies attempt to build digital platforms for U.S. companies. “Almost every major U.S. firm is building some form of digital platform so it can enhance its competitive position both domestically and internationally,” he said. “This is probably the most important thing these firms are doing and success will define both company and global success as we move into the future.”

The mistaken premise of nearly all restrictions on high-skilled immigration is that foreign-born scientists and engineers offer no value to America or U.S. companies except for a willingness to work for less money. Some policymakers believe that people born in other countries possess inferior abilities to people born in the United States—hence the belief companies must pay them lower salaries—and incorrectly assume that only a fixed number of jobs exist in the U.S. economy. The Biden administration has an opportunity to adopt a more forward-looking policy.

Source: https://www.forbes.com/sites/stuartanderson/2021/06/02/2021-might-be-a-decisive-year-for-h-1b-visas/?utm_source=newsletter&utm_medium=email&utm_campaign=follow&cdlcid=5e4bc7f55b099ce02faa6b40&utm_source=newsletter&utm_medium=email&utm_campaign=follow&cdlcid=5e4bc7f55b099ce02faa6b40&sh=7932dc0018df

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H-1B visa: American Silicon Valley veteran employs foreign workers in Canada for U.S. firms

2021/05/20 Leave a comment

Canadian competitive advantage:

When a client of Marc Pavlopoulos’ tech-recruiting company asked for help placing an engineer outside the U.S. four years ago, Pavlopoulos thought of a possible solution: Canada. It might be a long shot since he knew from his time getting an MBA and working there that immigration officials were wary of foreign citizens taking jobs from Canadians. It turned out things had changed up north.

Eager to build up its technology industry, Canada had just launched a pilot project to provide Canadian companies with fast, reliable access to skilled foreign workers by making visas quick and easy to obtain. “Sure enough, we got the person in,” recalled Pavlopoulos, who spent years in Silicon Valley watching companies and foreign workers struggle with U.S. immigration and work permit systems.

But it wasn’t until he responded to another request for help from a frustrated Bay Area startup founder, and ended up talking to a Canadian immigration officer who encouraged him to use the new “Global Talent Stream” program to bring in “a bigger volume” of tech workers, that Pavlopoulos realized he might be onto a budding new business: employing tech workers for U.S. companies in Canada.

His outsourcing startup, Syndesus, makes an end-run around a big problem plaguing U.S. businesses seeking top tech talent. Foreign workers are often out of reach because the H-1B visa, allocated by lottery and intended for jobs requiring specialized skills, is hard to get and the path to a green card and citizenship is long and uncertain. Syndesus, a small but growing part of Pavlopoulos’ tech-talent business, helps American companies obtain workers who can’t get a visa in the U.S.

“Same laptop, same job, but they’re sitting in Vancouver,” he said.

Pavlopoulos has found opportunity amid a confluence of thorny issues in a global tech market: competition for skilled workers, a shortage of American workers with specialized skills, high labor costs in Silicon Valley and other U.S. hubs, and underlying it all, dramatic differences between the American and Canadian processes for bringing in foreign workers. In Canada, permanent residency — the equivalent of a green card — usually comes after a year or two, and citizenship typically follows in three to four-and-a-half years, Pavlopoulos said. In the U.S., the average wait for a green card is nearly six years, according to a Cato Institute report, with another five years before citizenship is possible. Many foreign workers wait much longer.

At the root of the problem for U.S. employers is that their demand outstrips the supply of new H-1B visas allocated each year. Around 200,000 applications from employers typically pour in each year for 85,000 visas. When an employer’s candidate — or a worker already employed on an expiring student visa — has not won the H-1B lottery, firms like Pavlopoulos’ step in. They remotely employ the workers, pay them and provide benefits and legal compliance, while billing the U.S. company for their costs and services.

America’s furor over immigration has swept up the H-1B, which helps firms secure foreign workers but whose critics say is used to acquire cheaper labor. Uncertainty about lingering effects from a crackdown on the H-1B program by the administration of former President Donald Trump, combined with relatively onerous immigration and work permit processes and a pandemic-induced shift to remote work, have made the demand for Syndesus’ services stronger.

“Every day now, I’m on a call with someone whose H-1B didn’t get picked in the lottery,” Pavlopoulos said.

Pavlopoulos, who worked in the Bay Area in software sales before launching a recruiting firm, is now based in New York, employing a handful of skilled workers in Canada on behalf of U.S. companies through an outsourcing model known as a “professional employer organization.” Typically, PEOs provide a worker with the benefits of direct employment in a structure that resembles contract work.

Canada’s Consul General in San Francisco said the PEO industry is expanding rapidly, to his country’s benefit. “We’re in a global talent race right now,” Rana Sarkar said.

Canada, after relying for decades on logging, mining, hydroelectric power, and oil and gas to power its economy, has diversified rapidly and successfully into tech, leveraging a group of high-caliber universities and world-leading research centers. The country for nearly a decade has been smoothing the way for foreign workers to feed its boom, even buying billboard ads in Silicon Valley to woo workers at one point.

Pavlopoulos also believes the PEO industry is ripe to expand, in part because “most Silicon Valley tech companies do not know that this option exists.” In the first two years of his new business, Syndesus helped three tech workers who couldn’t stay in the U.S. get Canadian work visas. Pavlopoulos is applying for work permits for another six tech workers on expiring student visas and expects they’ll be living and working in Canada in four to eight weeks.

Companies whose work is done in Canada via a PEO also get the advantage of lower health insurance costs, and usually, lower salaries, Pavlopoulos said. But what many employers say they want most is good people, and quickly, he said.

Daniel Mandelbaum, a Toronto immigration lawyer who works with Pavlopoulos, added that Syndesus provides certainty for U.S. companies and employees. “The worker doesn’t have to be looking over their shoulder on temporary residence status,” he said.

Given Canada’s drive to bring in 1.2 million immigrants this year and the next two, and U.S. demand for skilled workers continuing to outstrip available visas, Mandelbaum expects he’ll continue to “feed this hungry beast south of the border” with tech workers located in Canada.

“This is the start of it,” Mandelbaum said. “We’re ramping up.”

Source: H-1B visa: American Silicon Valley veteran employs foreign workers in Canada for U.S. firms

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Evidence Mounts That Reducing Immigration Harms America’s Economy

2021/04/02 Leave a comment

Some useful recent studies, particularly with respect to H1-B visas and skilled workers. Less convinced by some of the general demographic arguments, similar to those made in Canada by the Century Initiative and others. Shout-out to Canadian Darrell Bricker and John Ibbitson, authors of the book Empty Planet, making the same broader arguments (with some of the same fallacies):

Donald Trump’s immigration policies were harmful to America’s long-term economic future. That becomes clearer as one compares the Trump administration’s actions to the projected increase in the number of immigrants under recently introduced immigration legislation. The U.S. Citizenship Act, developed by the Biden administration, would aid long-term economic growth by increasing the number of legal immigrants by 28%. In contrast, Trump administration policies would have cut legal immigration in half. The immigration policy path America chooses in the long-term will make a significant impact on economic growth and future labor force growth, of which immigrants are a vital part.

Economic growth or growth in Gross Domestic Product (GDP) is necessary for a country’s inhabitants to improve their standard of living. “GDP growth [economic growth] is made up of growth in the workforce plus growth in labor productivity,” according to Robert S. Kaplan, president and CEO of the Federal Reserve Bank of Dallas. “Unless slower workforce growth is offset by improved productivity growth, U.S. GDP growth will slow.”

The Trump administration’s immigration policies harmed long-term economic growth by reducing labor force growth and potential productivity growth through restrictive policies.

High-skilled foreign nationals are important to productivity growth. Yet the Trump administration increased the denial rates of H-1B petitions, causing many long-time H-1B visa holders to leave the United States. The administration also blocked the entry of H-1B visa holders and published regulations that employers believed would make it nearly impossible for many foreign-born scientists and engineers to work in the United States.

“When we aggregate at the national level, inflows of foreign STEM [science, technology, engineering and math] workers explain between 30% and 50% of the aggregate productivity growth that took place in the United States between 1990 and 2010,” according to economists Giovanni Peri (UC, Davis), Kevin Shih (RPI) and Chad Sparber (Colgate University). Research by economist Britta Glennon found rather than saving jobs, H-1B restrictions “have the unintended consequence of encouraging firms to offshore jobs abroad.”

While the Biden-supported U.S. Citizenship Act may have a difficult time becoming law, it serves as a marker for changes to legal immigration by increasing both family and employment-based immigration. The bill would have a positive impact on labor force growth by raising immigration by 28% a year after a transition period.

“Increasing legal immigration by 28% a year would increase the average annual labor force growth in the United States by 23% over current U.S. projections, which would help economic growth and address a slower-growing U.S. workforce,” according to an analysis by the National Foundation for American Policy (NFAP). “The average annual labor force growth could be even more than 23% compared to a scenario of no immigration increases because the Bureau of Labor Statistics currently projects the U.S. labor force will grow by 800,000 a year, and that baseline growth may be lower after 2029 without the increase in immigration contained in the bill.”

“In contrast,” the analysis continues, “if the United States continued the Trump administration’s policies that administratively reduced legal immigration by approximately 49%, average annual labor force growth would be approximately 59% lower than compared to a policy of no immigration reductions, according to an NFAP analysis. Under policies that reduced legal immigration by half, in 40 years the United States would have only about 6 million more people in the labor force than it has today. Admitting fewer immigrants results in lower economic growth because labor force growth is an important element of economic growth and immigrants play a major part in both current and future labor force growth.”

A recent National Foundation for American Policy study by Madeline Zavodny, an economics professor at the University of North Florida, shows the positive impact of immigration.

“Analysis of U.S. Census Bureau data finds international migration was the only source of population growth in rural areas as a whole during most of the 2010s,” writes Zavodny. “International migration is strongly related to employment growth in both rural and metro counties. Each additional international migrant is associated with an additional 1.2 jobs in rural counties over 2010 to 2018. The estimate for rural areas suggests that international migration adds to total employment well beyond the jobs filled by international migrants. International migrants may have a larger impact on employment because of the jobs they fill. International migrants may work in jobs that otherwise would go unfilled by local residents and thereby enable businesses to expand.”

Due to declines in fertility, immigration keeps the United States from experiencing negative population growth, according to the U.S. Census Bureau.

New economic research finds that negative or falling population growth may yield harmful economic outcomes beyond slowing labor force growth. Fewer available minds may mean fewer solutions to our problems. What if the breakthrough advances in mRNA made by Katalin Karikó, an Hungarian-born immigrant to America, never happened or occurred years later because Karikó was never born? How would that have affected the development of vaccines and other potential solutions to medical problems?

In a recent paper, “The End of Economic Growth? Unintended Consequences of a Declining Population,” Charles I. Jones, a professor of economics at the Stanford Graduate School of Business, writes, “What happens to economic growth if population growth is negative? We show below—first in models with exogenous [external] population growth and then later in a model with endogenous (internal) fertility—that negative population growth can be particularly harmful.” He asks: “How do idea-based growth models behave when population declines?”

In sum, with fewer people, “knowledge and living standards stagnate.” Jones writes, “If knowledge were to depreciate at a constant exogenous [external] rate, it is easy to show in the simple models at the start of this paper that this would lead to declining living standards in the presence of negative population growth, an even more dire outcome.”

“We refer to this as the Empty Planet result,” writes Jones. “Economic growth stagnates as the stock of knowledge and living standards settle down to constant values.”

Immigration can prevent population decline in the United States and allow America to grow—if U.S. elected officials choose the right policies. “Among great powers, the coming population decline uniquely advantages the United States,” according to Darrell Bricker and John Ibbitson, authors of the book Empty Planet, the title to which Charles Jones referred. “For centuries, America has welcomed new arrivals, first from across the Atlantic, then the Pacific as well, and today from across the Rio Grande. Millions have happily plunged into the melting pot—America’s version of multiculturism—enriching both its economy and culture. Immigrants made the twentieth century the American century, and continued immigration will define the twenty-first as American as well.

“Unless. The suspicious, nativist, America First groundswell of recent years threatens to choke off the immigration tap that made America great by walling up the border between the United States and everywhere else. Under President Donald Trump, the federal government not only cracked down on illegal immigrants, it reduced legal admissions for skilled workers, a suicidal policy for the U.S. economy. If this change is permanent, if Americans out of senseless fear reject their immigrant tradition, turning their backs on the world, then the United States too will decline, in numbers and power and influence and wealth. This is the choice that every American must make: to support and open, inclusive, welcoming society, or to shut the door and wither in isolation.” It is a significant choice.

Source: Evidence Mounts That Reducing Immigration Harms America’s Economy

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