Opinion

The Great Debate

The NBA has America’s model migrant worker program

By Tim Fernholz
June 15, 2012

If you’ve watched the NBA playoffs, you’ve seen the Oklahoma City Thunders’ rangy Swiss guard, Thabo Sefolosha, and his courtmate, human basketball swatter, and Spanish national, Serge Ibaka. To get to the finals, Sefolosha and Ibaka beat Tony Parker and Manu Ginobli, two international anchors for the very American San Antonio Spurs. In the finals, Sefolosha and Ibaka are facing off against Ronny Turiaf, the Miami Heat’s erstwhile benchwarmer, who hails from France, to see who gets to take the NBA Finals trophy away from German forward Dirk Nowitzki, the MVP of last year’s championship.

This seems like common sense – the best in their field want to come ply their trade in America, so why wouldn’t we let them? The increased competition has improved revenue for teams and created a better product for fans. But other sectors of the economy can’t follow the example of professional sport leagues. The government won’t let them.

The NBA is not alone in investing in importing the best human capital from around the world to maintain its edge. The Stanley Cup-winning Los Angeles Kings were powered by the goal scoring of Yugoslavian center Anze Kopitar; Ichiro’s arrival in Seattle to play for the Mariners was accompanied by a crush of Japanese advertising.

If coaches and fans alike can appreciate the benefits of an open labor market in sports, why can’t we take that lesson and apply it to far more important sectors of our economy.

Silicon Valley seems like a worthy case study. The Bay Area’s tech sector is the NBA of global technology. It’s not that you can’t start a great tech company anywhere with an Internet connection and some smarts, or that you can’t play basketball anywhere with a hoop. It’s that when you want to have access to the most resources, the biggest arena, the most attention, the most highly talented teammates and competitors, and, above all, the most money, you have to go to the Big Show.

But Silicon Valley doesn’t have the same international labor mobility as the sports leagues. To import the talent it needs – people with advanced degrees in computer science and engineering – it relies on a visa category for highly skilled workers. The U.S. admits only 65,000 of these workers each year across all industries, compared with our 150 million-person workforce. With demand for skilled workers high, the cap is often reached within weeks; in 2008, it took a single day.

Last week, visa applicants hit the cap – not for this year, but for the year after. Any company hoping to hire a skilled foreign worker now has to wait until 2014.

It’s not like Silicon Valley doesn’t want new talent. They’re desperate for it: Peter Thiel, the PayPal co-founder and venture capitalist, has proposed building a floating city in international waters off San Francisco to bring foreign workers closer to the tech Mecca.

Many other sectors are hurting for people with advanced degrees in chemistry, biology, math and engineering; America’s education system just isn’t producing enough of them, a bigger problem for another day. For now, getting the most talented people into the most important sectors of the U.S. economy seems far more important than getting the most talented players into U.S. uniforms – especially considering that immigrants play a major role in founding and running the top venture-capital-backed firms in the tech sector. You don’t have to look further than Google’s Sergei Brin (Russia) or SpaceX’s Elon Musk (South Africa).

And yet.

“It’s much easier to get a professional athlete, especially an athlete with some level of notoriety and a good pedigree of athletic accomplishments, it’s much easier to get them visas.” That’s Stephen Hader, the head of the immigration practice at the law firm Moore & Van Allen. Hader handled the visa process for David Beckham, the British soccer star who is rounding out his career with a stint at the Los Angeles Galaxy. The application process took about 10 days, he said, and Beckham was able to pick up his visa in Madrid (where he was playing at the time) fairly painlessly.

Highly skilled workers have a tougher time. Aside from snagging one of the 65,000 visas before they run out, non-athletes often need to pay higher fees. Linda Rose, a Nashville immigration attorney, says that can be as much as $2,000 more. The process also requires much more uncertainty on the part of employers, who need to think years into the future about talented foreign hires.

The restrictions on the H-1B are not without their reasons, the immigration attorneys note. There have been abuses of the visa category, and the term “highly skilled” was often stretched to mean anyone with a bachelor’s degree, whatever the institution. Labor unions, who pushed for the cap, feared that corporations could use the category to surreptitiously bring in low-paid foreign workers to replace American employees. Others worried about creating a second class of workers, entirely dependent on their employers.

While fighting fraud and protecting workers is laudable, Hader says the cap on highly skilled visas was “a knee-jerk reaction.” It would be better to be more creative in selecting the right qualifications: He suggests lifting the cap on workers with master’s degrees or higher in science, engineering, technology and math, all highly sought after in today’s economy, and taking into consideration the kind of work a company does when considering admitting potential workers.

Many of Rose’s clients are foreign students who come to the U.S. on a track scholarship and want to continue their training here; if they have success in national or international competitions, it’s relatively easy for them to get an athletic visa. But the majority of the 750,000 or so foreign students studying at American universities who aren’t star athletes have a harder time staying in the country after graduation. That’s leaving money on the table: One report found that tossing out those graduates cost the U.S. economy $13.6 billion between 2003 and 2007.

There are more economic benefits to bringing and keeping highly skilled workers in the United States. Jobs are one of them: A recent study by the American Enterprise Institute found that every 100 H1-B visas issued resulted in 183 jobs created for U.S. natives. More competition among educated workers is still good for less educated Americans; economist Enrico Moretti finds that people with a high school education see their incomes increase 7 percent for every 10 percent increase in their city’s population of college educated workers.

Just ask NBA fans what they think of letting players like Ibaka and Sefolosha do their work in the United States instead of Spain or France. They’ll tell you it’s a slam dunk.

PHOTO: Oklahoma City Thunder power forward Serge Ibaka (L) celebrates his basket with teammates Russell Westbrook (R) and Thabo Sefolosha during Game 6 of the NBA Western Conference basketball finals against the San Antonio Spurs in Oklahoma City, Oklahoma, June 6, 2012. REUTERS/Jim Young

Comments
5 comments so far | RSS Comments RSS

The H1B visa program has destroyed the American middle class.

It’s really a simple case of Supply and Demand. Consider an analogy. Consider, for example, what would happen if H1B visas were applied to plumbers instead of engineers.

For this thought experiment, pick any city, let’s say, Denver, Colorado. Now, bring in 100 busloads of freshly graduated plumbers (4,000 new plumbers from India), who want to enter into the plumbing business in Denver, and make a living.

The result? Wage rates for plumbers will become depressed. The existing 960 plumbers in Denver, once busy every day, and making a good living, will now have much less work, or no work at all.

Who can compete with improverished hordes of plumbers from India who will work for any price? India has 1.17 BILLION people, and many of them are coming here, flooding our labor markets.

The H1B Visa law was created, written and lobbied for by large American corporations as a means for decreasing their engineering labor costs. Indeed their corporate profits have zoomed up, up, up — while the wage rates paid to their American engineers have gone down, down, down.

This is what the H1B Visa has done to the American engineering profession. H1B has already brought in over one million foreign engineers to America, thus driving down wages, closing American engineering schools, and discouraging American kids from majoring in engineering.

The H1B Visa program has destroyed America’s middle class.

Posted by AdamSmith | Report as abusive
 

Take it from someone who has DIRECT experience with the H1B Visa program: it has already destroyed mass quantities of quality American jobs and given them to India and China. The author of this article, Tim Fernholz, is an idiot and wackjob author who belongs at Fox News and not Reuters. Making a business comparison between the NBA and general US industry reminds me of Barry Goldwater’s statement when he would walk by unemployed people and remark “The wortheless unemployed — if you had any real initiative, you’d go out and inherit a department store chain.” The key is this: H1B visas EQUALIZE wages and work conditions in place A and place B. In this case, place A is the USA and place B is India/China. Place A has work standards, minimum wages, and common human decency. Place B allows multi-generational slavery, allows people to live in squalor and filth, treats people like dogs, and you can only have one child or you go to jail. Oh, and the good companies tolerate people jumping off their slave dorm balconies because the work conditions are so oppressive. If you want to allow the continuation of the USA stooping down to these conditions, then go ahead and support H1B visas, but if you want the USA to be a place where there is a middle class, then H1B visas are EVIL and should be stopped now. Thank you for listening.

Posted by NeoDemo | Report as abusive
 

Microsoft had an offshore H-1B/L1 visa mill, in British Columbia. The Director of this division told reporters: “It’s the guys without a turban who are the standouts”: http://www.sikhchic.com/article-detail.p hp?id=1013&cat=8 .

One of their workers was a British PhD, who they brought to the US on H-1B.

According to this government ruling, they violated H-1B law by forcing him to work for no pay part of the time and Canadian dollars the rest:

http://tinyurl.com/7lhq6yc .

He seems to have lost his job shortly after complaining about it.

This illustrates the H-1B is not a “genius visa” bringing potential Nobel prize-winners. It is an indentured-worker visa that allows companies to replace unionized Americans with foreigners having little to no rights. For the first time, there is a net migration of Mexicans out of America, which is an indicator that the US is seen as a sinking ship and it’s time to seek better opportunities at home.

In a decade or two, when India and China have the same technological infrastructure as Japan, this endless supply of indentured workers and cheap outsourcing centers will cease and corporations shall have so betrayed home-grown engineers that they have neither cheap foreign labor nor qualified home-grown labor, as American students desert the sciences in favor of degrees in law or business that offer better job prospects.

At that stage, Silicon Valley will shut down and the world economy shall revolve around chips made in Taiwan. Software firms will close down as the Indian workers who once supported Microsoft in droves start their own businesses in India, where local labor remains a more cost-effective option than emigrating to the US.

Grassley has been good at playing the psuedo-race-card, “The beleaguered American under the yoke of the foreign menace”, but he has failed to tackle the issue at its source. Give a company legalized slave labor and they won’t give it up. All the Congressional rhetoric in the world won’t help, since Microsoft has the same lobbying power as any tobacco company. Congress should end the slavery fostered by Foxconn and the H-1B. Only then will companies turn to American labor first.

Posted by Edna_Bucket | Report as abusive
 

The trope that the US has a shortage of capable STEM workers is might-tee convenient for technology companies, and should be greeted with some skepticism by the press. But of course that’s not how the press behaves in the US nowadays.

With an MS in Computer Science from a US public university, I work with more people on H-1B visas than US citizens, while former co-workers change careers since both pay and working conditions have deteriorated significantly in the past dozen years. Those on H-1B are largely unqualified (although there are exceptions), but management has no reliable metrics for productivity in engineering, so their numbers say they’ve saved a bundle. Me, I look for early retirement and tell any young person who will listen to avoid these careers if at all possible. We just might succeed in creating a shortage of US STEM workers by falsely believing one to exist already.

Posted by Sanity-Monger | Report as abusive
 

I can’t say much about the H-1B but one thing for sure, it has created too much negative impressions for STEM career.

Not good at all.

Posted by trevorh | Report as abusive
 

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