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Professors warn that grads could face competition from H-1B workers

Patrick Thibodeau | Nov. 18, 2013
H-1B workers, many under 30 and getting entry-level work, compete directly with new grads

 If Congress does take action on an immigration overhaul, an H-1B increase will part of it. And the prospect of a big jump in the temporary work visas is worrisome to some academics, who say it will have consequences for students.

The nexus of H-1B visas and higher education came up Friday during a policy forum for U.S. House staff members focused on H-1B visas.

Karen Panetta, a professor of electrical engineering at Tufts University, says a master's degree is the new bachelor degree in the employment market, and it is increasing the financial burdens on students. The cost of tuition in the U.S. "is so unrealistically prohibitive," what you are finding "is a class shift," said Panetta.

"The really wealthy are the only ones who can afford to send their kids to school," she said.

These students will face increasing competition from lower-wage H-1B workers if the federal cap on visas rises -- and Panetta doesn't believe people see the connection between student debt and H-1B workers. "We can't solve the problem unless we have all the parameters and variables of the equation," she said.

One big variable for Panetta is tuition debt. She said her students owe $50,000, on average. "It's the house you are not going to be able to buy for another 10 years," she said.

Ron Hira, a public policy professor at the Rochester Institute of Technology and the forum moderator, said there are an estimated 650,000 H-1B workers in the U.S., and the program "is used very extensively for cheap labor."

The major H-1B using firms are mostly offshore companies based overseas. For those firms, median salaries range from $61,000 to $70,500. But for U.S. firms that are also large users of H-1B visas, median salaries are higher. They include: Microsoft, $95,000; Intel, $85,000; and Google, $110,000, according to Hira's data.

In May, the Senate passed a comprehensive immigration bill that immediately increases the H-1B cap from 65,000 to 110,000 and allows it to gradually increase to as high as 180,000 visas a year. Visas for advanced degree holders from U.S. universities would increase from 20,000 to 25,000.

Despite the Senate action, the U.S. House has not acted on any immigration bill. The outlook for any action in that chamber is uncertain at best.

Hal Salzman, a professor of public policy at Rutgers University, said that the U.S. produces enough graduates to satisfy the demand of the labor market. But if the cap increase goes through, it will swamp the market, especially hitting under-30 workers.

Neeraj Gupta, the CEO of Systems in Motion, a domestic IT sourcing firm, runs a company with about 300 tech workers. It's based in Ann Arbor, Mich., and is opening a second services center in Columbus, Ohio.


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