As a Berkeley professor, I see the impact H-1B visas and AI have on students’ job opportunities

The H-1B visa program was intended to bring in specialized talent from abroad, but instead it has become a tool for employers to hire lower-cost labor for ordinary jobs. 

The result is a distorted job market, where highly skilled workers are being squeezed out of the H-1B visa program by spam applications for ordinary workers who then take entry-level positions that are already in short supply. This misuse of H-1B visas has a negative synergy with growing impact of AI on the job market and is part of a larger problem that urgently needs attention.

The impact of this visa-farming problem is particularly acute among young people and recent college graduates, who face a bleak job market despite moderate overall unemployment rates. According to government data, the ratio of unemployment for college grads under 25 to those over 25 has hit an all-time high of more than four to one. This means that entry-level jobs are already four times more scarce than jobs requiring experience or advanced expertise. 

I have seen firsthand the symptoms of decreasing demand for entry-level tech jobs. These symptoms include fewer job notices from recruiters targeting fresh CS grads, job fairs with fewer companies, and concerned advisees getting fewer offers with lower pay or in some cases not getting any offers at all. Awarding the H-1B visas to low-paid, non-specialist workers only exacerbates this scarcity while doing little to fill the actual demand for workers with specialist skills.

H-1B VISAS HURT ONE TYPE OF WORKER AND EXPLOIT ANOTHER. THIS MESS MUST BE FIXED

The problem here is not about the number of visas issued, but rather how they’re being used. Program applicants explicitly should be people with specialized skills, and those specialized skills should not be readily available from existing resident workers. However, the bureaucratic review process allows employers to exaggerate claims and hire workers with ordinary skills at low wages. There is an entire sub-profession of HR staff and attorneys that specialize in dressing up pigeons to look like peacocks. 

This abuse of the application process has created a lottery system where workers with the needed special skills often lose out to those who don’t have any specialized skills. As a result, recent graduates are finding it harder to get entry-level work, while at the same time companies that really need specific specialized skills can’t get visas for those workers. Imagine a person who is suffering from both malnutrition and diabetes because instead of vitamins, they have been gobbling sugar pills.

I want to emphasize that I’m not advocating for insular restrictions on the number of H-1B visas. The issue is about ensuring that people with real specialized skills that are actually needed are being welcomed through the H-1B program. When used properly, an H-1B visa brings in someone who supplements the workforce with skills that are both needed and specialized, potentially benefiting the whole country. Whether it’s retaining a graduating international student or bringing in someone from outside the country, the U.S. has historically benefited immensely from immigrants with needed skills.

Many people who are invested in visa farming insist unconvincingly that the H-1B visas are already going to specialized workers as intended, but the statistics on H-1B visa recipients don’t agree. 

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According to the annual report from the U.S. government’s Office of Citizenship and Immigration Services, nearly 63,000 of the 2023 H-1B visa recipients were in “Computer-Related Occupations” and the median salary for this group was $99,000 per year with 25% of them earning less than $85,000. A salary of $99,000 or $85,000 per year is certainly a good amount to be earning, but it is quite low for what I would expect someone with rare specialized skills in this field to be earning. 

One would think that people with specialized, hard-to-find skills would earn exceptionally good salaries, but instead these data show the opposite. In fact, the more I dig into the data in the agency’s annual report, the less it appears that approved applications are for exceptional people for specialized jobs. It looks more like some specially skilled workers mixed in with a lot of regular workers who are being paid on the low end of what I’d expect. 

These observations are consistent with my own experiences in hiring tech workers and advising CS students, what has been related to me first hand by others, and numerous recently published analyses. The only clear explanation I see for these inconsistencies is that employers are submitting entry-level positions, not ones requiring special rare skills, that even for entry-level the salaries are low, and that those non-conforming applications are not being rejected.

Looking at the bigger picture, misuse of H-1B visas is not the only obstacle that U.S. job seekers face because AI automation is also eliminating jobs, compounding scarcity. Currently, the impact of AI is disproportionately on entry-level jobs, which exacerbates the problems caused by abuse of the H-1B program. However, AI will continue to improve, both in capability and ease of use, and its impact on the job market will grow as the range of tasks that can be done by AI expands. 

MAGA’S H-1B ‘CIVIL WAR’ IS EXACTLY HOW POLITICS IS SUPPOSED TO WORK

While AI and H-1B visa abuse may appear to be distinct problems, they interact in a way that most people don’t appreciate. Even when it can’t totally replace a human worker, AI facilitates moving work away from regular employees to contractors or remote workers. 

The explanation is that AI often removes the need for an advanced specialized skill or knowledge, and replaces it with a lesser requirement of only needing the ability to review work for correctness. The result is that tasks which previously were too complex for moving to contractors or remote workers now become simpler due to AI and more suitable for externalizing. 

As AI technology continues to improve employers will find that more and more jobs can be done by less-skilled workers, and there will be increased motivation to use H-1B visas for hiring those less-skilled workers cheaply. 

The review process for the H-1B visa program needs to be reformed to prioritize applicants with real specialized talents and to ensure that recipients don’t unfairly compete with workers already in the U.S. We must also address the growing threat of AI automation and its growing impact on the job market. 

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Roughly 90% all of U.S. tax revenue comes from taxing the income of working individuals, so if unemployment continues to expand then tax revenue will dramatically shrink. At the same time, the number of unemployed people needing public assistance needs will skyrocket. That combination doesn’t work mathematically and is a clear recipe for disaster. 

This situation demands radical change to avoid a dystopian future. Overall unemployment numbers may appear robust, but high levels of entry-level unemployment and overall underemployment indicate that a much bigger problem is developing.

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Disclaimer: Any opinions expressed in this article are only those of the author as a private individual. Nothing in this article should be interpreted as a statement made in relation to the author’s professional position with any institution.