LSAT (Law School Admission Test) Logical Reasoning: Questions 1 of 55

Passage

The H-1B program is often discussed as a way to alleviate labor shortages: Import foreign specialists to do work that native-born Americans are unavailable to do. That՚s how advocates often sell the program, and it fits the common idea of jobs as a fixed resource to be parceled out. In fact, helping companies “who cannot otherwise obtain needed business skills and abilities from the U. S. workforce” is right there in the program՚s mission statement.

But in reality, relieving shortages has little to do with the H-1B program՚s true economic purpose. H-1B visas expand the available pool of skilled workers in the country, which makes the U. S. a more attractive place for high-value industries to locate. Without the ability to hire talented foreigners on American soil, tech companies will take their offices to Asia, Europe, or elsewhere. The total number of high-paying tech jobs in the U. S. will then shrink.

That՚s why it makes no sense to talk about “shortages” of skilled workers; the more of them the U. S. takes in, the more the number of jobs will grow. And that՚s why a number of studies find that allowing in more H-1B workers actually increases job opportunities and wages for native-born workers of all education levels. H-1B workers also produce lots of innovation, which helps maintain U. S. technological leadership over rivals like China.

There are still basically two problems with the H-1B program. The first is that the visas often go to workers who don՚t really help grow the U. S. tech industry. The program is dominated by outsourcing and consulting firms, which generally do lower-value work, pay lower wages, and don՚t produce innovation themselves. In 2019, six of the top 10 companies getting H-1B approvals were outsourcing or consulting firms.

Allowing outsourcing and consulting firms to hire cheap foreign labor in the U. S. is not a bad thing. It results in some increased investment, and those foreign workers spend their money locally, which boosts local economies. But it՚s far from optimal use of the H-1B program, and it crowds out far more innovative companies and higher-value workers.

The easiest way of addressing this problem would be to simply raise the cap on the total number of H-1Bs, from the current level of 85,000 to the 195,000 that prevailed in the early 2000s. In addition, it makes sense to raise the minimum salary that employers are required to pay H-1B workers. In a world where super-high-value workers are clamoring to enter the U. S. , requiring higher wages means that lower-productivity outsourcing and consulting workers will be replaced with higher-value engineers and researchers.

The U. S. Labor Department has just done this, implementing a 30% increase in the required salary for H-1B workers. This effectively eliminates the lowest-skill tier of H-1B jobs and will mean more spots available for the higher tiers. That will raise the program՚s productivity and innovation output, and potentially quiet populist fears that H-1Bs represent low-paid replacements for U. S. workers.

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