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.