Why Trump Believes His H1B Plan Is Serious

In his just-released immigration policy paper, Donald Trump, who is seeking the Republican presidential nomination, wants to make it more expensive to hire foreign workers, and in doing so, encourage the hiring of U.S. workers.

Trump, a billionaire businessman now leading the Republican field in the polls, has an H-1B reform proposal that’s a clear challenge to his rivals — and it tweaks the nose of the tech industry.

If H-1B workers are indeed “the best and the brightest,” Trump seems to be telling the industry, then raising their wages shouldn’t be a problem.

Meanwhile, one tech industry lobbying group decried Trump’s overall immigration proposals, including the H-1B related plans. FWD.us president Todd Schulte, in a blog post Wednesday, said “the idea we should radically restrict pathways for highly-skilled immigrants to come and stay here is — again — just wrong,” he wrote. He called for increasing access to green cards, as well as for raising the H-1B visa cap.

Here’s how Trump’s plan works:

H-1B workers are paid the prevailing wages, which are “at least equal” to wages paid to workers with similar experience, according to the U.S. Department of Labor. There are four levels of prevailing wages, and they can vary widely depending on the geography.

Let’s take Des Moines, Iowa, for instance.

Here are prevailing annual wages for “computer programmers” in Des Moines:

* Level 1 [Entry level, basic understanding]: $46,000
* Level 2 [Qualified, good understanding]: $58,157
* Level 3 [Experienced, special skills or knowledge]: $69,534
* Level 4 [Fully competent]: $80,891

(You can see what the prevailing wage rates are for your area and occupation at the Foreign Labor Certification Data Center.)

Trump points out that more than half of the workers on H-1B visas receive entry-level pay, and that Level 1 and 2 salaries account for more than 80% of prevailing wage levels. Trump is correct. According to a Government Accountability Office study, 54% of all H-1B workers are paid entry level wages, or level 1, and 29% of the temporary visa workforce is paid at Level 2.

Trump didn’t say exactly what he would do to raise the prevailing wage, but his statement strongly implies he would set the third skill level as the wage floor. This means the minimum an H-1B visa holding computer programmer could be paid in Des Moines is $69,534.

Using Level 3 as the wage floor isn’t a radical concept: it represents 50th percentile or the median.

The H-1B program has long been attacked as a cheap labor program because of its prevailing wage levels and how it allows firms to hire workers cheaply. “Multiply those savings by six years (the life of an H-1B visa) and you see how much employers are saving when they hire an H-1B instead of a U.S. worker,” Daniel Costa, director of immigration law and policy research at the Economic Policy Institute (EPI), has argued.

Trump’s reform ideas aren’t new and they have a long pedigree found in research papers and legislative efforts. But he is the first candidate to give the H-1B visa issue this level of visibility in a presidential race.

The second major part of Trump’s proposal is a requirement that companies hire Americans first. U.S. Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.), have, over the years, offered up a similar proposal.

U.S. workers can be replaced by H-1B visa holders under current law. The Southern California Edison case “demolishes the myth of H-1Bs only being hired when no American worker can be found – American workers were already doing the job and being replaced by H-1Bs,” Ron Hira, an associate professor of public policy, said in Senate testimony last March at a hearing about H-1B visa.

Trump argues that prevailing wage hikes and hiring rules will improve hiring, particularly for entry-level workers.

Norm Matloff, a computer science professor at the University of California at Davis, gave Trump an “A+” for his H-1B proposals on his blog. But he later urged his readers to forget what he had written about Trump’s H-1B plan, after Trump tweeted this: “When foreigners attend our great colleges & want to stay in the U.S., they should not be thrown out of our country.”

But Trump followed that tweet with another to reinforce his H-1B proposal. “My H-1B reform plan will transform program so it delivers for country, not lobbyists, & will have bipartisan support.”

Copyright © 2015 IDG Communications, Inc.