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Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Rules and Regulations
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the fact that more than a third of recent American graduates with STEM degrees do not obtain work in a STEM field indicates that there is no shortage of qualified recent American graduates to fill STEM jobs.99
Finally, concerning the comment that H1B workers are more costly than U.S.
workers, DHS recognizes that employers often incur upfront costs to file H1B
petitions including filing fees and preparation fees. However, DHS
believes these upfront costs are offset by the employers ability to legally pay their H1B employees relatively low wages below the local median wage.
Data show that the majority of H1B
cap-subject petitions have been filed for positions certified at the level I or level II prevailing wages, both of which are set below the local median wage.100
Employers may realize additional cost savings over the span of several years as they continue to employ these H1B
workers at below-median wages without any statutory requirement to increase the workers wage levels or wages beyond the minimum required wages.
Unlike U.S. workers, H1B workers are tied to their specific employer, and, therefore, may lack the negotiating power of similarly skilled U.S. workers objective measure, most H1B workers have no more than ordinary skills, skills that are abundantly available in the US labor market. That means they are likely competing with and substituting for US
workers, rather than complementing them as was the programs intention . . . H1B workers are underpaid and placed in substandard working conditions, while US workers wages are depressed, and they lose out on job opportunities.
99 See Ron Hira and Bharath Gopalaswamy, Reforming US High-Skilled Guestworker Program, Atlantic Council Jan. 2019, at 7, https
www.atlanticcouncil.org/wp-content/uploads/2019/
09/Reforming_US_High-Skilled_Guestworkers_
Program.pdf Further examining the career transitions of these graduates, we look at the reasons why a third of computer science graduates, and nearly half of engineering graduates, do not go into a job directly related to their degree Figure E.
For computer science graduates employed one year after graduation i.e., excluding those unemployed or in graduate school, about half of those who took a job outside of IT say they did so because the career prospects were better elsewhere, and roughly a third because they couldnt find a job in IT. For engineering graduates, its about an even split, with approximately one-third each saying they did not enter an engineering job either because of career prospects or they couldnt find an engineering job.
In short, of those graduates with the most ITrelevant education, a large share report they were unable to find an IT job while others found IT jobs to be paying lower wages or offering less attractive working conditions and career prospects than other, non-STEM jobs..
100 See Daniel Costa and Ron Hira, H1B Visas and Prevailing Wage Level, Economic Policy Institute May 4, 2020, https www.epi.org/
publication/h-1b-visas-and-prevailingwage-levels/
explaining that the H1B allows employers to use the H1B program to pay H1B workers well below market wages and undercut local wages.

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to request wage increases.101 DHS
believes that the random selection process is not fair to U.S. workers whose wages may be adversely impacted by relatively lower-paid H1B workers.
c. Lack of Evidence To Support Rulemaking Comments: An advocacy group stated that the evidence provided in the NPRM
is not robust enough to justify such a dramatic change in policy. According to the commenter, the agency failed to consider multiple sources that suggest the current H1B program benefits U.S.
workers and the economy. Similarly, a trade association said that the Agency selectively cherrypicked a small minority of studies from sources that regularly object to the use of temporary highly-skilled foreign talent, asserting that, had USCIS completed a more comprehensive review of literature, it would have been clear that the H1B
visa program and workers make significant contributions to the U.S.
economy and society.
A joint submission from multiple organizations said that DHS even communicates its failure to gather sufficient evidence before publication, and that DHS appears to be operating under the misconception that anything can be published as an NPRM and the burden shifts to the public to analyze the potential impacts. The commenters said that DHS should gather more data before restarting the regulatory process.
An individual commenter similarly said that the agency provides inadequate justifications for the proposed changes, while another individual commenter said that the proposed rule is halfbaked and flawed in a number of ways and requires proper rule-making procedures. An individual commenter stated that the proposed rule does not explain how giving priority to higher wage levels is a more efficient allocation process than the current random lottery process. The commenter said the H1B
lottery is a fair solution to the issue of many petitions arriving on the same day or time, and the proposed rule would go beyond the principle of fairness.
A trade association stated that the APA does not allow an agency to make significant change without completing an accurate cost-benefit analysis, which the agency did not do, nor did it allow 101 See Ron Hira and Bharath Gopalaswamy, Reforming US High-Skilled Guestworker Program, Atlantic Council Jan. 2019, https
www.atlanticcouncil.org/wp-content/uploads/2019/
09/Reforming_US_High-Skilled_Guestworkers_
Program.pdf The current system not only harms Americans; it also enables H1B workers to be exploited. H1B workers themselves are underpaid, vulnerable to abuse, and frequently placed in poor working conditions..

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sufficient time for stakeholders to conduct their own assessments. A
company similarly stated that the Departments scant justification for wage-based selection of H1B petitions violates the APA because a Level I or II
prevailing wage does not mean that that the worker is not highly skilled or vital.
The company said that the Departments reasoning for the proposed rule lacks a rational connection between the facts found and the choice made. An anonymous commenter wrote that the proposal is arbitrary and capricious, asserting that DHS does not explain the rationale behind making wages the sole indicator of a workers eligibility for visa sponsorship.
Response: DHS disagrees with these comments. DHS conducted a comprehensive review of the issues, relying on both internal data and external studies and reports.102 DHS
acknowledges the articles, studies, and reports submitted by commenters that purport to show the overall benefits of H1B workers.103 DHS recognizes that some H1B workers do fill gaps in the labor market and make contributions to the overall economy. However, while some studies show the benefits of H1B
workers overall, DHS also believes that sufficient evidence demonstrates that a prevalence of relatively lower-paid and lower-skilled H1B workers is 102 See, e.g., Kirk Doran et al., The Effects of HighSkilled Immigration Policy on Firms: Evidence from Visa Lotteries, University of Notre Dame Feb.
2016, https gspp.berkeley.edu/assets/uploads/
research/pdf/h1b.pdf; John Bound et al., Understanding the Economic Impact of the H1B
Program on the U.S., Working Paper 23153, National Bureau of Economic Research Feb. 2017, http www.nber.org/papers/w23153; Daniel Costa and Ron Hira, H1B Visas and Prevailing Wage Level, Economic Policy Institute May 4, 2020, https www.epi.org/publication/h-1b-visas-andprevailing-wage-levels/.
103 See, e.g., Neil G. Ruiz and Jens Manuel Krogstad, Salaries Have Risen for High-Skilled Foreign Workers in U.S. on H1B Visas, Pew Research Center Aug. 16, 2017, https
www.pewresearch.org/facttank/2017/08/16/
salaries-have-risen-for-high-skilled-foreign-workersin-u-s-on-h-1b-visas/; A. Nicole Kreisberg, H1B
Visas: No Impact on Wages, American Institute for Economic Research Sept. 2014, https
www.aier.org/research/h-1b-visas-no-impact-onwages/; Jonathan Rothwell and Neil G. Ruiz, H1B
Visas and the STEM Shortage, The Brookings Institution May 10, 2013, https
www.brookings.edu/research/h-1b-visas-and-thestem-shortage/; Neil G. Ruiz et al., The Search for Skills: Demand for H1B Immigrant Workers in U.S.
Metropolitan Areas, The Brookings Institution July 18, 2012, https www.brookings.edu/research/thesearch-for-skills-demand-for-h-1b-immigrantworkers-in-u-s-metropolitan-areas/; Madeline Zavodny, The H1B Program and Its Effects on Information Technology Workers, Federal Reserve Bank of Atlanta Sept. 2003, https
www.frbatlanta.org/research/publications/
economic-review/2003/q3/vol88no3_H-1B-programand-effects-on-information-technologyworkers.aspx.

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