Report: High-Skill Worker Funds Target Wrong Parts of Country

Money raised through visa applications to pay for high-skill worker training doesn't actually match geographic demand, according to a new report.
March 14, 2013

Money raised through visa applications to pay for high-skill worker training in the United States doesn't actually match geographic demand, according to a new report from the Metropolitan Policy Program at the Brookings Institution. The result? Too much funding for places that have relatively little need for high-skill workers.

H-1B visas for immigrant workers in specialty fields can cost employers between $1,575 and $4,325 and are valid for an initial period of three years. In the past decade, the federal government invested about $1 billion of H-1B visa fee revenue in programs to fill high-skill worker shortages. But geographic distribution isn’t a consideration in the current process, resulting in disparities between H-1B visa requests -- a proxy for high-skill worker demand -- and grant money received, the Brookings researchers found.

The 106 metropolitan areas with the highest demand (an average of at least 250 annual visa requests for 2010 and 2011) received almost five times less grant funding per working-age person than metro areas with low demand ($3.09 per working-age person vs. $15.26).

Take, for example, the San Jose metro area in California. For 2010 and 2011, it ranked first in the number of H-1B visa requests per 1,000 workers (17.10) and fourth in the total number of H-1B visa requests (14,926). Yet between 2001 and 2011, the San Jose area ranked 56th in per capita dollars received from H-1B visa grants for metro areas ($2.07 million).

The difference between demand and funding is even greater in the Austin, Texas, metro area. Despite 3,087 visa requests during 2010 and 2011, it didn’t receive any grant money through H-1B visa revenue in the previous decade. Some 36 “high-demand” metro areas didn’t garner any grant funding, the researchers found.

The inequity epitomized by the San Jose and Austin metro areas can be corrected, said Neil Ruiz, a senior policy analyst with Brookings.

“The original intention of the program was to go the areas and occupations where it’s most needed,” Ruiz said.

Ruiz and fellow research analyst Jill Wilson recommend that the federal government revise the way it invests the visa fee revenues so that the money goes to metropolitan areas that most need high-skill workers. They also propose grants be distributed to public-private partnerships with an advisory board of local employers and educational institutions. As a model, they cite the Kansas Engineering Excellence Project in Wichita, Kan., which helps the long-term unemployed earn college and graduate degrees in engineering at Wichita State University. The program works because local employers and university representatives create training programs that meet shortages in the local labor market, Ruiz said.

A window for reform might be opening. This year the U.S. Senate is considering revisions to the H-1B visa program. A bipartisan group of senators have backed the Immigration Innovation Act of 2013, which would add a $1,000 fee to pay for training in science, technology, engineering and mathematics, funneled through the U.S. Department of Education and given to states using a student-based formula. (Much of the bill focuses on changing the rules related to granting H-1B visas, including lifting the cap from 65,000 to 115,000 visas per year.)

It’s too early to say whether Congress will adopt elements of the Brookings proposal, though Ruiz acknowledged the policy could face political hurdles because it changes who receives the visa fee revenue. By orienting the grant program around places with the highest demand, some metro areas would likely miss out on future funding. Gainesville, Fla., for example, saw an annual average of 336 visa requests (84th out of all metro areas) for 2010 and 2011, but received $4.9 million in grant money from 2001 to 2011 -- the most per-capita dollars through H-1B visa grants of any metro area in the country.

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