Obama plan gives tech firms boost in foreign job pool

President Barack Obama's immigration order will let U.S. companies temporarily hire more foreign college graduates even as it stops short of providing more of the H1-B work visas favored by technology companies.

Obama, in his plan announced last night, will expand a training program that allows foreign citizens who earn U.S. degrees in science, technology, engineering and math to work in the U.S. for up to 29 months. The training arrangement is used by companies including Twitter Inc. and Intel Corp.

The president won't increase the number of H1-B visas for high-skilled workers important to the technology industry, or allow more green cards granting permanent residency.

That means the effect of Obama's order is limited because it is only a "temporary fix," said Emily Lam, vice president of federal issues for the San Jose, California-based Silicon Valley Leadership Group. The trade association represents almost 400 companies, most of them in technology.

"We still need a legislative fix, when the preference of many companies is to have more green cards available," Lam said. "This is a good start."

Obama probably didn't have a choice.

Neil Ruiz, senior policy analyst at the Brookings Institution in Washington, said Obama probably chose to expand the Optional Practical Training program because increasing the H1-B visas might be more difficult without the backing of Congress. The training program is administered by a branch of the Department of Homeland Security.

"Many companies would prefer longer-termed visas," Ruiz said. The training program "is not meant as a long-term work program, but it's probably the only thing Obama can do without Congress."

Technology executives have long complained about a talent shortage in the U.S. and have lobbied Congress to raise the number of longer-term H1-B visas for skilled workers.

Those visas are limited to 65,000 a year for the general population, plus another 20,000 for those with U.S. advanced degrees. An immigration bill passed by the Senate in 2013 would have increased those numbers.

Even if it's not their first choice, companies are still eager to use the shorter-term training program. Intel, based in Santa Clara, California, along with San Francisco-based Twitter, have found workers this way.

'Best' Graduates

The "work authorization is very important to Twitter as it allows us to hire the best and the brightest graduates from U.S. universities regardless of their citizenship," Natalie Miyake, a Twitter spokeswoman, said in an e-mail.

Intel also uses the program to hire foreign-born students, said Lisa Malloy, a company spokeswoman. The company has about 1,000 jobs to fill, according to its website.

Obama's approach has some drawbacks. It may create an incentive to hire foreign graduates of U.S. colleges at the expense of their American peers, said Daniel Costa, director of immigration law and policy research at the Washington-based Economic Policy Institute. The organization says it seeks to include low- and middle-income workers' needs in policy discussions.

Another concern is that the training program doesn't require employers to pay participants a prevailing industry wage or make an effort to hire U.S. workers first, Costa said. That may depress wages for all workers, he said.

Employers may favor foreign graduates because they can pay "artificially low wages to people who can't leave the job as easily," Costa said. "U.S. workers have to compete with that, which means they have to accept lower wages when they get a job."

About 123,000 foreign students had approval to participate in the training program during the fiscal year that ended in September 2013, according to a Government Accountability Office report. The study, published in February, criticized the U.S. government for failing to keep tabs on the program or the students involved in in it.

The U.S. Immigration and Customs Enforcement agency "cannot determine whether students with employment authorization are in jobs related to their studies and not exceeding regulatory limits on unemployment," the review said.

The lack of oversight can hurt students seeking jobs, said Kim Berry, president of the Programmers Guild, a group that opposes laws allowing technology companies to employ less expensive foreign workers.

"We don't really know what's happening," Berry said. "They are expanding an invisible program where if the person wants to work for minimum wage that is OK."

The expansion "is throwing new grads under the bus," Berry said.

Vivek Wadhwa, a fellow at the Rock Center for Corporate Governance at Stanford University in California, called the order "a Band-Aid that just defers immigration problems including the H-1B work visa cap and green card backlog."

The expansion gives students some experience and says, "now you've become so valuable, please leave the country," Wadhwa said.