The immigration system shouldn’t care about your job description

Prioritize talent, not titles.

The one imperative of a successful high-skilled immigration system, to state the burningly obvious, is to attract and admit the highest-skilled immigrants.

The new plan from the Department of Homeland Security (DHS) for H-1B visas fails this simple precondition. As we explained in an earlier post, rather than prioritize immigrants with the highest salaries overall — the best available proxy of an immigrant’s future economic contributions to the country — the DHS plan boosts applicants with the highest salaries within their own occupations. The result is that public relations specialists further along in their careers will be prioritized higher than than early-career physicists, even if the latter earn twice the salary.

This is the wrong way to go about selecting applicants for scarce visas. In fact, the immigration system probably shouldn’t care about your occupation at all.

The kinds of jobs and industries that emerge or decline can rapidly change because of new technologies and the normal evolution of the economy. An immigration system focused on applicants in particular occupations — through hard limits on eligibility, or preferences for certain job types — therefore risks depriving the economy of the flexibility to acquire the skills it most urgently needs in a given year.

Some visa systems try to prioritize applicants with jobs where there is a so-called “labor shortage.” In the United States, for example, the Department of Labor speeds up green card applications for workers whose occupations are on a list called Schedule A. One problem: it’s a list of two — nurses and physical therapists — and hasn’t been updated since 2004.

Obsolete data isn’t the only problem with using “labor shortage” lists for prioritizing skilled immigrants. Elsewhere, such lists have ended up reflecting the pressure of lobbyists rather than the needs of the economy. Businesses facing wage pressures cannot distinguish benign, long-term shifts in labor markets from true, structural labor shortages. Yet policymakers usually take an industry’s claims of a “labor shortage” at face value. In the United Kingdom, for example, occupations like dancers, bricklayers, and welders can qualify for lower salary minimums on the country’s Skilled Worker Visa thanks to their “shortage” designations.

Basing visa decisions on occupational categories can also incentivize fraud, as we demonstrate in our recent letter to DHS. When workers in some occupations are prioritized over others, employers have an incentive to massage job descriptions to fit those favored categories. The difference between a software engineer and a computer programmer, for example, isn’t always clear. Targeted surveillance and enforcement could ameliorate this problem somewhat, but it would also put the government in the awkward position of punishing workers and companies when successful employees do more-sophisticated tasks than what they were initially hired for. Job duties evolve over time. Workers improve.

We applaud the intent of occupation and shortage-based visa programs. Their goal is to identify the most pressing needs of employers and the overall economy. They just fail to achieve it.

Instead, we argue that raw salary is a much better proxy for what these systems are trying to target.

It may not be obvious that salaries are the best way to choose skilled immigrants. Large economies need all kinds of labor, including lower-paying jobs in healthcare, social services, and retail. But salary reflects a combination of the economic value a worker brings to a company and the scarcity of that worker’s skills. Both matter.

Some workers, for example, may have skills that are incredibly rare but don’t add much to companies’ bottom lines. Consider circus performers. They won’t command particularly high salaries, even though few people can swallow swords and live to tell about it.

On the other hand, welders are highly valuable to industries across the economy — but America already has a lot of welders. Welding also has relatively low barriers to entry. Rising wages in welding will eventually lead to more welding trainees to meet demand.

Some jobs have very high salaries on an ongoing basis because they require highly valuable skills that markets struggle to supply in high quantities. Think of researchers doing cutting-edge research at pharmaceutical companies. Discovering a new drug can earn a pharmaceutical company tens of billions of dollars. And most people don’t have the capabilities to do cutting-edge scientific research, so high pay can only go so far in incentivizing new scientists.

There are niche but valuable areas of science in which America, as large as it is, doesn’t have much of a foothold. High salaries therefore serve as the best signal we have for who should be prioritized for one of a limited number of high-skilled visas, such as the H-1B.

In some rare cases, salary might not be the right mechanism for selecting and prioritizing work visa applicants. There are industries we may want to boost for reasons beyond raw economic logic. The risks to American economic security from a reliance on Taiwanese-made semiconductors, for example, are not fully reflected in market prices. We proposed the Chipmaker’s Visa because the urgency to reshore chip production stems from more than just the industry’s economic value. Even if some semiconductor engineers might have salaries not in the top 85,000 applicants — and thus would win an H-1B under a wage-based ranking — the need to reshore is too urgent to rely on domestic talent alone.

Yet these are very limited exceptions. For the most part, market wages are the best indicator of the skills the American economy needs. Immigration policy should be designed accordingly.