In Reforming H-1B, Don’t Forget OPT

OPT (“Optional Practical Training”) is part of the F-1 student visa program, allowing foreign students to work in the U.S. for a certain period of time, ostensibly to get practical internship experience before returning to their home country. Last year the Obama administration extended OPT to a 3-year period for STEM students. More on the details below, but first here is the central point of my post this evening.

I was startled today to read the following in the Chronicle of Higher Education (“From China to America. Then What?”,  January 29, 2017):

Last year there were more than 52,000 Chinese graduates on OPT alone. One in every six student-visa holders from China is, in fact, working, not studying, in the United States.

52,000! And 16% of the Chinese students working rather than studying. These numbers are not new, or are at least deducible from published figures, but seeing them described in these terms really took me aback.

And according to the pro-F-1 organization IIE, the overall number is 147,000. Since the number of workers holding the H-1B visa is on the order of several hundred thousand, it is clear that OPT is a major issue.

I’ve emphasized that H-1B is largely about age — employers hire young H-1Bs in lieu of older (35+) U.S. citizens and permanent residents. Since OPT is for new graduates, who almost always are young, OPT has a big impact on older American workers.

The impact is also on the American new graduates. A number of people have pointed out that OPT workers, as “students,” are not subject to FICA tax, thus making foreign students somewhat more attractive to employers as hires than domestic students. But there is a more subtle, and much more harmful impact of OPT as well: A foreign student can use OPT time for an internship, say during a summer, BEFORE she graduates, as Ms. Wu is doing in the Chronicle article. Since internships are hard to get in STEM (the article uses the word coveted), the competition between foreign and domestic students for internships, enabled by OPT, is a very serious issue.

Note carefully that OPT did not arise out of legislation. Instead, the executive branch, many years ago, devised it on their own, declaring a post-graduation internship to be part of being a student. The original duration was one year, but was increased to 29 months by George W. Bush and then 36 months by Obama. As Prof. Ron Hira has pointed out, the idea that someone graduating with a Master’s degree then needs a 3-year “internship” is preposterous.

Not only is the extra-legislative provenance of this policy suspect, but also the original intent has been completely ignored. Supposedly the idea of OPT was to give foreign students practical experience to take back to the impoverished Third World. Yet last year even the DHS admitted that OPT is now used mainly as a holding pattern by employers of F-1 graduates who are waiting to “win” the H-1B lottery.

In other words, OPT is basically a farce — a 147,000-worker farce.

The Chronicle article profile of Wendy Wu, and a type of case I’ve seen many times: The student drifts around in the U.S. from one school to another (3 in Wu’s case), or from one academic field to another, buying time until something comes through that allows her to stay. My aim here is to criticize policy rather than Ms. Wu, and some here know that I am partial to the Cantonese :-). Good for her for her persistence and grit, and I am sure she is a competent worker.

But her LinkedIn profile indicates that she is typical of the phrase I use for the foreign tech workers — ordinary people doing ordinary work, from ordinary schools. The vast majority are not The Best and the Brightest.

Some may object, pointing out that Wu does have an internship at Google, a firm with high standards. But it’s just an internship, not necessarily leading to a permanent job, and frankly, often coming largely from having the right connections. And as I have stated before, Google gives unwarranted preference to hiring foreign workers.

I will take Wu individually to task on one point. She is quoted in the article as follows:

She had come to the country legally, paid her taxes, and followed its laws. It frustrated her to be labeled a job-taker, an interloper. In fact, a recent lawsuit, filed by a group of high-tech workers, accuses foreign graduates in the optional practical training program of snatching opportunities that would have gone to Americans.

Wendy found such anger misplaced. Thousands of technology-sector positions, she says, are going unfilled, and workers from overseas are helping meet the demand. (Whether or not there is a talent drought in the high-tech work force has, unsurprisingly, become embroiled in political debate.)

Besides, she wasn’t looking for a leg up. When, at the end of her first year of graduate school, she won a coveted Google internship, she knew she had earned it, through perseverance, focus, and hard work.

“This is a competitive market. Nothing’s handed to you,” she says. “Stop arguing about where I am. Look at how I got there.”

It is this sense of entitlement that has often bothered me. That 147,000 figure vividly shows that foreign graduates working on OPT do have an adverse impact on new American graduates (not to mention the impact on the older Americans). And of course her claim that there is a tech labor shortage is simply false, as has been shown statistically and otherwise.

The Trump administration is currently working on reform of the alphabet soup of work visas. Hopefully they won’t forget OPT. At a minimum, the Bush/Obama extensions of OPT need to be rolled back.

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25 thoughts on “In Reforming H-1B, Don’t Forget OPT

  1. What surpasses understanding is why any employer would want these people. Interns don’t do real work, they don’t really earn their keep, neither do most first year workers, and hardly any are serious contributors before finishing their second year. Even if they then contribute in their third year, if they then leave with their experience the whole thing balances out as zero. What is wrong with our major employers?

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    • Internships are much more sophisticated today than in the old days. Many in fact do indeed do real work. Also, from the employer’s point of view, it gives them a chance to see what the student is really like in terms of technical ability etc., which is typically not very clear from a mere interview.

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  2. if 65% of that 147,000 also pursue computer and mathematical occupations, and we are only creating a total of about 135,000 jobs each year in the computer and mathematical occupation, well you can easily see why Americans can no longer buy an interview in the computer and mathematical occupation.

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  3. I feel bad for that poor girl, as you exposed her name and social media profile in the article, she is likely to be harassed by your angry readers and those xenophobes from numbersUSA. You accuse me and foreign students of having sense of entitlement, what kind of sense of entitlement makes you think what you are doing is ok ?

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    • I doubt that what you say will happen, and I object to your characterizing NumbersUSA in that manner.

      But it is true that once one becomes a public figure, one is “public” by definition. Ms. Wu seems to have had no worries in that regard, as she actually revealed much more about herself in that article than what I quoted. The article is behind a pay wall, but I am a subscriber, and will send it to you if you are interested. She is a Trump supporter, by the way, and THAT could bring her lots of harassment. 🙂

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  4. It seems that OPT has become a way of getting more Chinese into American tech jobs, as H-1B becomes increasingly Indian. Computer World said that 86% of computer H-1Bs were going to Indians as of 2015.

    http://www.computerworld.com/article/2956584/it-outsourcing/with-h-1b-visa-diversity-doesnt-apply.html

    Former H-1Bs from India who are now managers hire Indians, because they know just how to exploit them, and because they want to help their country of origin. Diversity is a sick joke.

    I note that the number of new H-1B visas issued has been climbing rapidly, Fiscal Year 2015 = 173K vs. Fiscal Year 2010 = 117K.

    https://travel.state.gov/content/dam/visas/Statistics/Graphs/H%20VisasWorldwide.pdf

    Mostly jobs exempt from the 85K quota, university and research, and people finding new ways to beat the system.

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  5. “Yet last year even the DHS admitted that OPT is now used mainly as a holding pattern by employers of F-1 graduates who are waiting to “win” the H-1B lottery.”

    Suppose a guest worker on the OPT program goes on to get a H-1B from the same employer. Can the employer justify paying him a level 1 or level 2 salary?

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    • This happens all the time. And it’s not just the salary, but getting the job in the first place. All of a sudden the foreign worker is “more qualified” than the Americans.

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  6. If H1B usage were mainly about age, they would be hiring US STEM new grads/youth, but they aren’t.
    Do understand most H1B/OPT are unaware of the work visa tax advantages/pay rate/indentured and not on their radar, yes, they do believe they were hired because they are uniquely qualified.
    That is, unless/until they are asked to pay for their visa, are laid off upon receiving their green card, having to test the wage value of their skills on a citizen/legal resident leveled playing field.
    As for “shortage”, there is no reason the H1Bs/OPTs would be aware the job ads which are a requirement for employer of pending employment-based green card applicant, are bogus. Along with state employment agencies, prospective students picking curriculum, etc., who cite statics based on the presumption that they are open hiring positions.

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    • The industry does indeed hire new domestic graduates. My department’s graduates are doing fine.

      But due to the foreign competition and advantages to hiring them, the new domestic grads may not get quite the job they want, at their favorite firm/location and so on. One little-known fact is that many of the domestic students, including the best ones, are shunted by employers into the “talking jobs,” e.g. client interface, while reserving most of the development jobs to the foreigners.

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  7. My current employer will only hire MS level graduates in comp sci and cybersecurity. Meanwhile, we have about a 35% H1B representation who appear to be mostly new grads. We also have a large summer internship program which appears to be quite “diverse” in regards to having non-Indians and non-Whites.

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    • But, will those interns, if hire for permanent jobs after graduation, be hired for technical positions or for “talking jobs.” Likely some of each, of course, but likely too many of the latter.

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  8. What I find interesting is the length of 36 months for a benefit that is excessively over-exaggerated.

    As a new grad from medical school, one can expect 36 months of residency (yes, not internship, but read on for my point). That makes sense – most of medicine is learned through hands on – even during medical school.

    My point is hands-on training is the most critical for the field of medicine. And MDs are looking at 36 months of residency before being a full-fledged doctor.

    An internship in a technical field that could last 36 months is absurd!

    As far as age, yes, Corporate America is age-averse, not just in the STEM industries. It is entirely a manifestation of social instinct, the human animal that is magnified by American culture.

    In short, the same primitive nature that has us prefer super models and the socially-confident is behind our aversion to age.

    The sad thing is Corporate America seems to prefer hiring people whose brains have not yet finished developing, let alone experienced enough to maximize the performance of an organization.

    Similarly, the trend to execute first and think later is the hallmark of Corporate America, which other countries often take note of.

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    • Yes, age discrimination is everywhere. But tech is different, because the employers can use the (supposedly) rapid change in technology as an excuse not to hire the older workers.

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  9. You simply cannot get trained in a lot of IT work without working for a company. The new software is very expensive and requires much more than a PC. So these foreign OPT workers are stealing vital opportunities from US stem students and older workers.

    And companies deliberately don’t give the opportunity for training to older workers. They justify getting rid of them because they don’t have the right skills. But without access to further training they can never get the right skills. Catch22. And these are people who have already demonstrated their aptitude and ability in the field! The talk of not enough American workers qualified to do the job is misleading and self serving.

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    • The skill sets issue is generally an excuse. Most people I know in the field do keep up their skill sets, and yet are still rejected without a phone interview for jobs for which they are qualified.

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