Opinion

Felix Salmon

Charts of the day, US legal immigration edition

By Felix Salmon
February 9, 2012

In general, immigration is incredibly healthy for any economy. Immigrants tend to work hard, boost GDP, fill jobs which would otherwise be hard to fill, and also create jobs of their own. But whatever’s true of immigrants in general is much more true of legal immigrants. And whatever’s true of legal immigrants in general is much more true of smart, high-qualified legal immigrants.

The US has various visas specifically designed to encourage the kind of skilled, legal immigration which has driven its economy for nearly all of its history. The three main ones are the O visa, the H visa, and the L visa. The O visa is a small program for “aliens of extraordinary ability”, and the H visa all but suffocated under its own popularity in 2007 and 2008. But the L visa kept on allowing people in. It’s given to employees of foreign companies, who have spent at least a year working for that company abroad, and who are only allowed to work for that company when they’re in the US. And historically it’s been quite easy to get, with Customs Immigration rejecting fewer than one in ten applicants. Until:

denial.tiff

This is bad, but it gets worse — the spike in denials seems to target specific countries over others. In 2008 the L-1B denial rate stood between 2% and 3% for India, Canada, Mexico, and the UK. In 2009, it rose: to 2.9% in Canada, and 4.1% in the UK. And 15.1% in Mexico. And 22.5% in India.

Meanwhile, in order to make things even harder, Customs Immigration didn’t just approve the applications that they didn’t deny. Instead, they increasingly sent them back with RFEs, or “requests for evidence” — a layer of bureaucracy which at best adds months to the visa-application process and makes it much harder for global companies to move employees to where they might be urgently needed. If you think the rise in denial rates is bad, just check this out:

RFE.tiff

It really does look as though Customs Immigration is in the middle of a massive crackdown on L-1B applications here. Now, why would they do that? Maybe because the number of applications was suddenly very high? No — it turns out that the drop in L-1B applications for Indians, the people who suffered the brunt of the crackdown, preceded the crackdown by a couple of years.

petitions.tiff

If you look at this last chart, what you’re seeing is just the number of L-1B visa applications from Indians. It’s falling sharply enough on its own — but then on top of that an increasing number of those petitions is being denied, and most of the rest are being sent back with an RFE.

All too often, the questions in the RFE, or the reasons for rejection, seem to imply rules which simply don’t exist:

Employers say that at times they believe applicants are rejected for L-1B status if a particular consular officer or an adjudicator believes a company could not possibly have more than three to five people with specialized knowledge in a particular area. Nothing in the statute or regulations indicates “specialized knowledge” need be restricted to a handful of people in a company. In fact, in companies employing thousands of people in highly specialized fields and product lines, it would not even be feasible to operate in most circumstances if specialized knowledge was restricted to three or four people at a time in a specific subject area, product or service.

Another type of denial, employers say, comes from USCIS adjudicators and consular officers requiring a standard of “extraordinary ability” be met to permit the transfer of employees into the United States with specialized knowledge. Requests for Evidence for L-1B have included asking whether the individual received a patent. And companies note that even patent holders have been denied L-1B petitions under the new, arbitrary standards.

Of course, Customs Immigration has discretion to reject anybody for any or no reason. No one has the right to immigrate to the US. But it does seem here that the US is rejecting far too many people — as though their job is to keep them out, rather than welcome them in.

Thanks to the National Foundation for American Policy for putting these charts together. As they note, everybody rejected has had a huge amount of money and effort put into their application. And so it does seem as though something bad is going on here.

Given the resources involved, employers are selective about who they sponsor. The high rate of denials (and Requests for Evidence) is from a pool of applicants selected by employers because they believe the foreign nationals meet the standard for approval, making the increase in denials difficult to defend. Denying employers the ability to transfer in key personnel or gain entry for a skilled professional or researcher harms innovation and job creation in the United States, encouraging employers to keep more resources outside the country to ensure predictability.

American cities won’t win the global competition for talent if federal officials keep on behaving like this. Canada can do this stuff well; why can’t the US?

Comments
11 comments so far | RSS Comments RSS

Great points. Looks like the spike in rejections tracks the U.S. unemployment rate, and I don’t know enough about the program to know if there’s any particular reason that it should.

Posted by realist50 | Report as abusive
 

I am an Indian, a H1 holder, previous L1 beneficiary, in the (long) legal green card line and a startup entrepreneur. By my last count, I am responsible for creating at least 10 jobs over the last few years. When people wring their hands about not letting in skilled workers or making life hard for them, they are usually referring to people like me. And lord knows, I have had plenty of frustrations with the immigration process.

Having said that, the big drop in L1 numbers can be directly related to the crackdown on L1 visa (ab)use by Indian software outsourcing shops (or the Indian software divisions of multinational consulting companies). Look at the primary beneficiaries of L1 visas – http://en.wikipedia.org/wiki/L-1_visa. These companies have also been at the receiving end of the crackdown on H1 (employment) and B1 (business) visas (Infosys is currently being sued by USCIS for multiple counts of B1 visa misuse).

And most of these visas are used by these companies to send people to the US for short term work assignments prior to or during the outsourcing engagement. In a majority of cases, the people who come to the US on these visas are not staying here permanently, though many would like to. USCIS has a legal obligation to ensure that American jobs are not jeopardized by the influx of immigrants, and as you can see a large category of the holders of L1 and H1 visas do end up having a negative impact on American jobs.

If this were just a few thousand people showing here, it would be fine. But, legitimate entrepreneurs and smaller businesses are crowded out by these vast visa application factories. These large shops have poisoned the well for smaller companies seeking skilled immigrants.

Posted by rajeshj | Report as abusive
 

It would be political suicide for an administration to continue the current rate of immigration or increase immigration while the unemployment rate increases. I, for one, think the track we are on is correct. How about we focus on education and less on immigration.

Posted by oneill | Report as abusive
 

There’s a reason the L and H are different categories – the L is not a visa for skilled workers, it’s a visa for intracompany transfers. That is, for employees of a company that have company-specific knowledge critical to the operation of the firm. Think business confidential-type information. As someone who has adjudicated these in the past, the blanket L1s (L1B, petitions without a particular individual identified) can be tricky and prone to abuse as a backdoor H1B. Qualifying as a manager? Can you fire people? Uh,no… Qualifying under specialized knowledge? You went through a two-month training program on the machinery? But your company has the same training program in the states? Sorry, no visa.

Posted by BigDonut | Report as abusive
 

BigDonut: the L1B requirement for specialized knowledge need not involve knowledge “critical” to the company. It only needs to be knowledge exclusive to the applicant. If he/she took a 2 month training course on a new type of machinery that was being deployed in the US and no US worker has this training, then that should satisfy the demands of the visa. Why? Forcing a company to instead switch gears and train a new employee from scratch will involve a 2 month delay before the new process can be implemented.
The answer is for multi-nationals to increase staffing and production outside the US to insure they don’t get trapped by the US immigration quagmire.

Posted by k9quaint | Report as abusive
 

k9quaint,

Critical is probably not the right word, though if someone could convince me that the company would delay production for 2 months if this person couldn’t go to the states, then they probably get the visa. But one of the main points of the visa is to boost US exports – thus, iirc, the specialized knowledge is supposed to be of the applicant’s home (or other overseas) market. However, what you see with some companies are large numbers of semi-skilled folks taking on more-or-less generic jobs (or who don’t really know what they’re going to be doing when they get to the states), or who are clearly not key employees. Now, there’s no sense requiring patents – that’s ridiculous.

Posted by BigDonut | Report as abusive
 

Felix, as the grandson of dirt farmers who entered the US through Ellis Island, immigration holds a very special place for me as part of the fundamental identity of America. And unlike you, I see immigration as a multi-generational value, and am not so concerned as to the ephemeral skills brought in by immigrants of the day.

That said, you are barking up the wrong tree here. L visas are rife with abuse; read and research what rajeshj has to say above before making such comments. And to say that Canada, a country that in effect sells legal entry, does this well is simply laughable. It really sounds like you want to make immigration easier for people just like you, but we need a far broader and longer term approach to have success over time.

Immigration is essential to the vitality and growth of the United States, now and in the future. The anti-immigrant crowd is wrong, but don’t give them ammunition like this half-baked garbage.

Posted by Curmudgeon | Report as abusive
 

As someone who has seen a lot of L1 visa requests being rejected, I can attest it is not about fraud, most were bona fide experts in their field. It isn’t about being semi-skilled either, lots of rejected cases for people with several years of experience in a niche technology . It’s mostly a trade protectionism step.

Because of the nature of L1 Visa, a rejected L1 visa request mostly just means the applicant keeps working from home country.I don’t think US looses out on talent because of Visa rejections, the only real impact is smaller Indian immigrant community and a increased use of Video conferencing tools. No new jobs get created because of L1 Visa rejections, but more jobs are created in applicants home country to support the consumption that would have shifted to US instead. Maybe more L1 Visa rejections is an excellent thing for India after all!

Posted by Skaul | Report as abusive
 

Felix,
You seem to have more than a few misconceptions.
L1B is NOT an immigrant visa. The employees brought in through L1 are NOT required to pay a wage comparable to what the position requires to be paid in the US and are paid wages in their HOME country.
What this results in is just low priced labour comming in which displaces not only american jobs, but even H1B’s as H1B’s are required to be paid a fair wage for the position and also should not displace american workers.
Basically, the L1B is just a way to get around the wage and other requirements of the H1B and other visa’s and should not be encouraged.
You should really put atleast a little more effort into knowing what you are writing about.

Posted by pot | Report as abusive
 

Pot, that L1B salaries are lower than H1B is not true for the information I have. We can fix that by keeping a salary floor on L1B applications. Salary being paid is reported during the application process, but I couldn’t find information on that at the UCICS website.

Posted by Skaul | Report as abusive
 

Felix – I am not sure you can infer anything from the charts you show, without knowing the back story. But note:

– it is not quite correct to say that the spike in applications predates the crackdown by several years. In fact, the first crackdown seems to have occurred right at the peak of the application spike, and was probably a reaction to the spike. (And it seems to have worked, though maybe now they could relent a bit.)

– the list of top companies for L-1 on Wikipedia does suggest companies were using it as an end run around the H-1B visa system. You very often have spillover effects from on category to another (H to L, or H to O) that change the mix and quality of applications you get, resulting in changes in the approval rate.

I have been on an H1-B in the past, so I am hardly anti-immigrant. But some fixes are needed in some of the programs. In cases such as H1-B, the solution is to just raise the minimum salary requirements — this way Google, MSFT, Facebook, and other high-paying companies get the people they need, and the bottom feeders go away. Win win.
So, use salary requirements, rather than first-come first-serve with a too tight quota, to control the flow.

Posted by TSTS | Report as abusive
 

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