USA Changes Law Damaging Prospects of International STEM Students


America’s international reputation for being a desirable location to study could be under threat after a federal judge invalidated one of the country’s most popular employment programs.

In 2008, America’s Department of Homeland Security acknowledged the lack of skilled workers in industry and successfully extended the work period for foreign students within the fields of Science, Technology, Engineering and Mathematics (STEM) from 12 months to 29 months.

However, last Wednesday, Judge Ellen Segal Huville of the U.S District Court for the District of Columbia ruled that the original 2008 extension to the Optional Practical Training Program (OPT) was issued without appropriate public notice and comment; therefore the extension is void.

The OPT is a 12-month temporary employment authorisation directly related to F-1 students’ major field of study. It provides opportunity for these students to apply knowledge acquired from their academic studies to practical work experience in their chosen specialisation.

OPT is usually available after successful completion of an academic program (post-completion OPT), though it is possible do undertake a pre-completion OPT, or combine pre-and post-OPT, providing that the student does not exceed the authorised 12-month period.

In 2008, ICE recorded that there were approximately 70,000 students in OPT, 23,000 of which were studying areas of Science, Technology, Engineering or Mathematics. The organisation predicted that a minority would be selected for a H-1B, a non-immigrant visa that allows U.S companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields, starting October that year.

Those who were not selected for a H-1B would either continue their studies or return home. ICE and UCIS estimated that approximately 12,000 students would benefit from the 2008 STEM extension.

Following the extension, the Washington Alliance of Technology Workers, a union that takes on issues affecting high-tech workers, sued the Department of Homeland Security claiming that the OPT program generates unfair competition by creating a cheaper category of workers who are often favoured over domestic candidates for employment.

While employers maintain that the country severely lacks technically skilled workers, prior research provides very little evidence to support this view. The CIS reported that 2012’s total STEM employment stood at 5.3 million (immigrant and native), and the total amount of STEM degree holders stood at 12.1 million (immigrant and native).

The CIS also reported that, in 2012, one third of native-born Americans in possession of an undergraduate STEM degree actually held down a STEM occupation. Despite the economic plunge, Census Bureau data showed that, between 2007 and 2012, approximately 700,000 new immigrants with STEM degrees were allowed to settle in the country, yet the total STEM employment only grew by about 500,000.

Little more than a third of immigrants possessing STEM degrees took a job in a STEM related field, while a similar number accepted work within a non-STEM occupation. Overall, less than half of the immigrants with STEM degrees found themselves in a STEM related career. For example, just 23 percent of all immigrants with degrees in Engineering actually took up work as an Engineer.

Via CIS.

It is clear that America has plenty of high-tech college graduates to fill these high-tech job roles, and most importantly, that the nation continues to produce enough quality STEM graduates to satisfy future demand.

However, the debate ensues due to the amount of STEM graduates and workers, as well as the number of H-1B temporary workers, flooding the American labour market with obedient, inexpensive and highly-skilled immigrants, mostly working in computer-related industries.

Why is American industry seeking such large numbers of H-1B workers? Is it due, as the industry claims, to a significant shortage of talent? Or perhaps as the Wall Street Journal claims, it is because employers would like to continue operating “with Indian expatriates who earn significantly less than their American counterparts.”

Since the time of Adam Smith, economists have agreed that the secret to economic growth is specialisation. Rather than everyone collecting their own water or building their own house, for example, everyone determines their own area of expertise and trades with the goods made by others. Inevitably, a higher population of highly-skilled specialised workers results in a higher rate of productivity. The more people you have trading the more widely the benefits are shared.

Via Brookings.

Immigration economists apply this intuition to the domestic labour market. Giovanni Peri, a specialist in immigration economics at the University of California at Davis sums it up in his own analogy:

“An extreme example of this would be if you have an engineer and you add a construction worker.

“With the engineer by himself you’re not going to do much. But with an engineer plus a construction worker, you can build a building.

“Therefore, the productivity of the engineer goes up a lot. And the wages for both workers increase.”

Immigration economists maintain that immigrant labour complements non-immigrant labour, as Peri stated in a 2010 paper for the San Francisco Federal Reserve: “Immigrants expand the U.S economy’s productive capacity, stimulate investment, and promote specialisation that in the long run boosts productivity.

U.S economy’s productive capacity, stimulate investment, and promote specialisation that in the long run boosts productivity.

“Consistent with previous research, there is no evidence that these take place at the expense of jobs for workers born in the United States.”

This being the case, it would seem that employers in America’s highly-skilled industries will continue to seek employees, both native and non-native, depending on their level of skill. But will prospective students hoping to study in America continue to take up these roles when they are consistently offered a lower wage than their American counterparts?

Employment programs such as the OPT provide such valuable practice and opportunity that international students were perhaps willing to disregard a dip in their rate of pay. The experience they gain from such comprehensive and practical instruction would benefit them that much in the future they are eager to accept whatever wage they are offered in the present.

In deciding to abrogate the 2008 rule regarding the OPT, Judge Huville imposed a six-month stay to give the agency enough time to address the problem. Huville noted that abolishing the rule so suddenly would cause “substantial hardship” for thousands of international students who would be forced to leave the States at short notice, whilst also causing “major disruption” in industries relating to technology.

Huville’s decision on the case has been delayed until February 2016, with the hope that the government will propose the extension again, only this time, abide by the rules. With the future of the OPT uncertain, what does this mean for America’s current STEM student population, and how will it affect the views of its prospective student cohort? Could this be the start of a crackdown on international student opportunity in America, and if so, will the nation maintain its top ranking as one of the world’s most favoured study destinations?

Image via Shutterstock.

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