Why They Call It a Labor 'Market': What Obama Got Wrong

With millions of people's lives in limbo because of our dysfunctional and misaligned immigration system, President Barack Obama acted last month to reach a commonsense approach to resolving the deportations implied by law with practicality, while awaiting a final resolution from Congress-more than a year in waiting. Of course, the same House Republican leadership that shut down the government rather than do its job of passing a budget-and was in session less than one-third of the year-objected, claiming the president was trying to do its job.

While the president sensibly offered meaningful relief to the parents of millions of American children, he also went in a wrong direction offering policy on temporary work visas. Letting American school children concentrate on studying, rather than be worried they might come back to empty homes because their parents had been deported makes sense. But, putting in place rules about the future flow of temporary work visas needs careful study.

In particular, the president, following the lead of President George W. Bush, wants to further loosen guidelines and restrictions on the extension of a visa program called Occupational and Professional Training (OPT), which is widely used as a bridge to help extend the duration and avoid the caps of the H-1B specialty occupation visa. In public, the president barely mentions this portion of his Executive Order.

Data from Department of Homeland Security shows that 61 percent of H-1B visas granted in fiscal year 2012 were for computer science workers. The claim of these employers, oft repeated in the court of public opinion, is that America's universities are failing us by not producing the workers needed for these gateway occupations to the future. But, the data tell a very different story. Since 2002, the number of Americans earning baccalaureate degrees in science and engineering has increased from 399,639 to 565,448 in 2012. But, while more Americans have been earning science and engineering degrees, fewer have been earning them in computer science; falling from a peak of 54,908 in 2004 to 45,595 in 2012. So, why if Americans with technical skills are increasing are they choosing to steer away from computer science?

During the depth of the Great Recession, in 2008 and 2009, the computer workforce also shrunk, losing 4,570 workers in 2008 and 19,740 positions in 2009. While the number of jobs were shrinking, the number of new baccalaureates in computer science continued with 37,118 new degrees awarded in 2008 and 36,667 in 2009. One would think that with Americans continuing to be produced in a field with shrinking jobs, that our national policy would eliminate granting visas to hire people in those same jobs. But, that was not the case. Homeland Security approved 58,074 new applications for H-1B visas in computer occupations in 2008 and renewed another 78,936.

And, the following year, with that labor market still shrinking, approved 29,793 in 2009 and renewed another 59,168. Given that the new authorizations are for three years, the annual issuance numbers represent only a fraction of the total number of H-1B visa workers in computer occupations competing for jobs at any given time. While computer and math occupations had a slight 6 percent pay advantage over architects and engineers in 2002, by 2012 it dipped in half to only 3 percent. People who have the math skills to do science and engineering obviously have the skills to figure out which science fields are the most open, and which are the weakest.

The president's decision to unilaterally grant favors to Silicon Valley has real implications that distort the labor market. First, expanding programs like the OPT that do not even guarantee minimum wage, let alone prevailing wage, chases Americans out of computer science and creates a self-fulfilling "shortage" as Americans respond to a relatively better market as engineers in other fields. Second, it is far from a race neutral policy. Like all Americans, about 30 percent of African-Americans who earned baccalaureates earn them in science and engineering fields. But African Americans who choose science were once far more likely to choose computer science as a major. In 2002, 14.5 percent of Black science and engineering majors chose computer science, versus 11.5 percent for all Americans. But, by 2012, the share of black science majors choosing computer science fell to 9.8 percent.

Whenever labor markets are weak, the room for discrimination, especially against African- Americans, runs high. Obama's proposed policy that favors Silicon Valley will work to disadvantage African -Americans. Leading employers in Silicon Valley have finally reported their record on the diversity of their workforce, showing very weak Black representation (roughly 3 percent). By contrast, the high presence of African-Americans (roughly 17 percent) in the large Internet computer technology corridor of the District of Columbia and its Maryland and Virginia (DMV) suburbs highlights the underperformance of Silicon Valley in building a representative workforce.

The future flow of temporary workers is, of course, not an answer to the pressing problems of a broken immigration system. Creating a functioning labor market means thinking through supply and demand. With America's college students struggling with heavy debts to pay for college, policies that undermine some majors-like computer science-will steer Americans to other majors. Policies to rig wages, such as Silicon Valley has pursued, further diminish producing American graduates in computer science. The president cannot fix the under funding of American colleges by executive order, though he can pursue anti-trust actions on wage fixing or prosecute firms that engage in discrimination in employment. Instead, under the guise of fixing immigration, he offered Silicon Valley a lobbying victory.

ENDS

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