Microsoft Corp. recently proposed that U.S. firms looking to hire technical talent from overseas pay $10,000 to $15,000 as a premium for each H1-B visa. The other part of the proposal is that the money be used to improve our schools so that we train enough Americans to fill those jobs in the future.
H1-B visas are essentially “guest worker” documents for those with higher education and specialized skills; a kind of soft-outsourcing. Microsoft, in particular, has had great difficulty in filling its computer science jobs and has long advocated the expansion of our universities’ programs in this, and related, areas. It also has been a vocal advocate of expanding the H1-B visa program, largely to no avail. The annual number of these visas is currently capped at 65,000 and Microsoft believes that number should be raised as soon as possible so that unfilled jobs don’t become a drag on our economy.
Guest workers and their documentation also pose a problem in U.S. agriculture, which is dependent on seasonal migrant labor for harvesting many crops. The significant difference is that agricultural work tends to be exhausting, backbreaking, and generally tough — but does not require lengthy or specialized training.
While there are important skills involved, the learning curve for most agricultural workers is not steep, and new workers can often be productive within hours. This has, at times, raised questions about critical farm labor shortages and unfilled jobs when the number of U.S. unemployed is so high.
What both guest worker situations have in common is that they are lightning rods for immigration politics and imagery. The result is that in an election year most politicians preferred inaction to stirring up an apiary of angry voters.
Much of Microsoft’s proposal and the surrounding environment are familiar territory, and even the idea of selling visas and residency documentation has been tried. Microsoft’s proposal doesn’t get really interesting until we follow the money.
The proposal involves using the employer-paid fees for the worker visas to train teachers and strengthen the K-12 curriculum in science, technology, engineering, and math (STEM) subjects. Funds would be used to broaden access to computer science in high school so students can explore career opportunities in that field.
Revenue from the visa fees also would be used to expand the capacity of our colleges and universities to deliver more graduates in STEM areas, including computer science.
From an economics standpoint, the proposals for both the K-12 and higher education systems have a common goal: increase the supply of workers so that the technical jobs we need to secure our economic future are filled by Americans.
The program makes a lot of sense, if we have a supply problem. It appears that we do, certainly, but if we examine it closely, it looks more like a demand problem.
There is no question that the growing number of unfilled jobs in our near-recession economy is a rebuke to our educational system. But, in a way that is even more embarrassing, our educational system is responsive to our demand. It reflects our values.
The underlying reason that colleges and universities do not have more programs and graduates in STEM subjects is that we don’t demand them. These programs are difficult and require extraordinary amounts of effort — and the vast majority of students prefer courses and majors that are less demanding. Colleges and universities have to import faculty, instructors and even students to sustain STEM programs.
The funding arrangements for much of our K-12 educational system are different, and its responsiveness to demand is less direct because it involves a broader array of stakeholders. However, it still responds, if slowly and in sometimes perplexing ways.
What our higher education and K-12 education systems have in common is one key characteristic: they are both convinced that education has to be entertaining. This belief shapes both demand and supply — and has a pernicious effect on educational systems at every level.
Without expanding demand, it is likely that no matter how admirable and well thought out the Microsoft proposal is, its money to increase supply would go for naught.
It is more likely that using the additional H1-B visa fees to increase demand would be effective. The funds could be used, for example, to subsidize student loans for students in STEM-related majors — doubling down for those who become K-12 teachers in those subjects. Similar approaches were used successfully in the National Student Loan program that was implemented after we were dope-slapped by the surprise Russian launch of the first artificial Earth satellite, Sputnik.
Our educational system is complex and influenced by many forces besides economics. Still, in any proposal, economics can be a powerful ally.