For more than 15 years, former Federal Reserve Chairman Alan Greenspan has been a part of the H-1B debate, calling for raising or eliminating visa caps. He did so again this week.
Greenspan's view is that the economy will expand with the size of the talent pool. But is he a credible source for arguing that the H-1B cap needs to be increased?
At a Council of Foreign Relations conference in New York, Greenspan was asked by Steve Liesman, a senior economics reporter for CNBC, whether productivity can be improved, in part, through immigration. Greenspan did not miss the beat.
"I thought the H-1B program is much too small," said Greenspan. "Every other major country looks to the quality of whom they are inviting in, and we're not doing that: We're restricting that very significantly," he said, according to a video of the conference.
In 2009, Greenspan also told lawmakers the visa quota too small and argued the cap was protecting U.S. workers from global competition, creating a "privileged elite." The H-1B cap is limited to 85,000.
In 2000, Greenspan told the Senate Banking committee, in response to a question about a bill raising the H-1B cap, that ''the benefits of bringing in people to do the work here, rather than doing the work elsewhere, to me, should be pretty self-evident."
Something else that should have been self-evident, particularly to the Federal Reserve under Greenspan's watch, were the looming subprime lending problems. Greenspan was chair of the Federal Reserve from 1987 to January 2006, leaving just before the economic meltdown that led to the Great Recession.
Despite "an explosion in risky subprime lending," rising debt, and a host of other ills, "little meaningful action was taken to quell the threats in a timely manner," wrote the U.S. Financial Crisis Inquiry Commission in its 2011 report. In short, the Fed didn't see the seriousness of the economic bubble that ballooned under Greenspan's watch.
There's a parallel argument today that the STEM workforce is also subject to bubble-like activity, as described by Michael Teitelbaum, a senior research associate at Harvard Law School, in his book, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent (Princeton University Press, 2014).
Other researchers have pointed out that only one in two STEM graduates is now employed in a STEM job after graduation.
The major proponents of raising the H-1B cap are industry groups, who are up against a handful of academics producing independent research. But a new group has entered this discussion in a big way -- the IT workers who have been replaced by H-1B workers as part of the process of transferring jobs overseas.
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