My question has to do with H-1B visa for STEM workers. Actually I have several questions. The first one is what tax incentives exist in current and future H-1B visa laws that are given to American companies when it comes to hire. H-1B visa has to do with hiring of foreign workers and I think, my belief is that, foreign workers are being hired at the expense of graduates of U.S. colleges and universities that for people who have degrees in the STEM career fields. And if there's tax incentives, why aren't the tax incentives to have, instead of hiring foreign workers, to hire American university graduates and don't give preferences to people who are here on a student visa but give preference to people who are here either as citizens or as people who have right to work visas.
Representative Honda gave the following reply:
On the H-1B, the H-1B was instituted because there was a shortage of STEM-related workers and there's been a big push to encourage more and more college students to go into STEM. And women also to go into STEM because the statistics says that there are more jobs than there are people. And so if there are students who are in STEM and not getting jobs I hope that that's not the case.
But the H-1B visa is very specific to the STEM arena and when the STEM allocations are given out the companies don't have a ???, they have to pay into a pot so that it will offset any cost that's incurred in bringing in an H-1B person in and also should be able to be utilized for the education system. So, they don't get a tax break, they're paid into the system. And I think under the system right now, I think, we are looking at about 86,000 H-1B and that goes very quickly. There's still a shortage, there's still a great need for H-1B visas but that was the cap. Under the comprehensive immigration reform, we have a trigger that would have allowed companies to be able to realize another allotment of H-1B visas.
But as to the protection of our students, statistically, we don't have enough students graduating from STEM. My son graduated in STEM and he got a job immediately in the aerospace industry. This was a few years ago when H-1B visas first started to come around. So as long as there are students who are getting their degrees in the STEM area, I think that they are not experiencing much difficulty in getting a job in the high-tech or the IT arenas.
So what I really think we need to bolster up the capacity of training more and more students and I think that the capacity is the issue ??? coming out and we're not putting enough incentives. I guess that's your point also that we probably should be putting more incentives into our students who would go to the STEM arena if they had an attraction to do that. But I think that we're looking at, between the ??? of those who are going into the STEM arena.
And, having said that, we are also looking at graduate students from foreign countries to provide them green cards so that they can stay because they've spent some time here learning our system and getting an education. We'd like to benefit from that also. But your bottom-line question should ??? and I think that that is the right direction that should be taken to put more investments in that. Thank you for your question.
Note: The above is my attempt at an accurate transcription of what was said, based on a recording of the question and answer. The four occurrences of ??? indicate places where I could not determine one or more of the words being said. An MP3 recording of the answer can be found at this link. The occasional beeping was due to the fact that the battery on my phone was extremely low.
Mr. Honda says several times that we have a shortage of STEM-related workers, shown in red above. In two of them, he says that this is backed up by statistics. In fact, Honda's entire answer seems to depend heavily on this shortage. He seems to say that, because there is a STEM shortage, tax incentives for U.S. companies are not required. Those companies are hiring all qualified U.S. graduates (and, presumedly, U.S. workers) and are hiring foreign workers simply to cover the shortfall. This implies that whatever incentives are required are needed to motivate university students to go into STEM, not to motivate companies to hire current U.S. students and workers.
The problem is, the contention that there is a shortage of STEM workers is heavily contested. The first 20 results from googling "shortage of STEM-related workers" (the first phrase used by Honda) can be seen at this link. Comments from references that argue that there is a STEM shortage are colored green and those that argue that there is not a STEM shortage are colored red. Those that give mixed opinions are not colored. As can be seen, 5 of the references are colored green, 9 are colored red, and 6 are not colored. This suggests that, as the third reference states, the contention that the U.S. has a shortage of STEM workers is a long-standing, highly contested policy issue. It would therefore seem incumbent upon Honda to present the statistics that allegedly settle this issue.
Honda also mentions the case of his son who "graduated in STEM and he got a job immediately in the aerospace industry". He goes on the concede that this happened "when H-1B visas first started to come around". From what appears to be his LinkedIn page, his son graduated with a BS in Aerospace Engineering in 1995 and immediately got a job with Hughes Space and Communications as Honda says. However, it should be noted that this was in 1995, just 5 years after the H-1B program began. According to this link, only 227,459 initial H-1B visa were issues from 1990 through 1995. Also, page 13 of the Characteristics of H-1B Specialty Occupation Workers lists that 64.5 percent of all H-1B beneficiaries in 2014 were in computer-related occupations and only 9.2 percent were in occupations in architecture, engineering, and surveying. Hence, the difficulty that a specific graduate in aerospace engineering had in finding a job in 1995 says little, if anything, about the difficulty that a graduate with a computer-related degree might have today.
This critique is not meant to single out Representative Honda since this unquestioning belief in a STEM shortage seems to be accepted by many in Congress. On the other hand, my experience in the industry leads me to believe that many employers create their own shortages, rejecting many qualified candidates due to age and visa status (including lack thereof). In any case, it does seem that anyone who believes that they have statistics that can settle this issue should present them. If and until the question of whether there is a STEM shortage can be settled, it would seem wise to make no assumptions about whether or not there is a shortage in fashioning the labor laws. The laws should be designed to give employers a path forward in the event that there truly is a shortage but protect workers in the event that there truly is not.