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Talk of H-1B Changes Has Companies on Edge

Not just anyone could have filled last year’s opening at Genben Lifesciences Corp. Founder Li Shen was looking for a bioinformatics scientist capable of applying advanced mathematical analysis to the human genome.

The company wanted to offer the job to a U.S. resident, because applying for permission to hire a foreign national would mean extensive paperwork and fee of a few thousand dollars. Unfortunately, a shortage of qualified domestic candidates left the company with little choice.

“If I can hire somebody with that quality that’s (an) American citizen, that’s even better. But I cannot,” Shen said. The San Diego nutritional genomics company ended up filing for a federal H-1B visa application to bring on a 30-something Chinese national straight out of graduate school at the University of Texas.

Such dilemmas are common in San Diego, where nearly 1,000 businesses combined for more than 3,000 H-1B applications last year. Their predicaments loom especially large these days as the Trump administration weighs revisions to the foreign worker visa program as part of its broader immigration reform efforts.

Even as it remains unclear what changes President Donald Trump might ultimately make, members of the local business community are raising concerns that restricting their access to highly trained, specialized foreign workers could jeopardize the region’s economic competitiveness.

“The perception is that the number of visas available is going to decline dramatically,” said Dr. Jeff Friedman, board member and life sciences advisor at Tech Coast Angels, a Southern California-based investor group.

Some of the group’s members went as far as to circulate an open letter among local business people calling attention to their concerns about limiting U.S. companies’ access to foreign workers.

“Everyone has said, ‘I have so-and-so who’s a chemist from Iran. I have so-and-so who trained in India. I have a specialist whose education was in Russia,’” Friedman said. “And (all) of these people are critical members of a team for smaller companies. They’re not easily replaceable.”

Added Concern

The situation has heightened tensions in a region where political and business leaders have openly expressed worries about Trump’s strained relations with Mexico, San Diego’s biggest trade partner, and his stated intention of renegotiating the North American Free Trade Agreement.

Several executives and investors began speaking up after the president signed an executive order Jan. 27 banning travel from seven countries to the United States, citing the terrorism concerns. The order does not directly affect the H-1B program.

Talk of revising the H-1B program is particularly noteworthy locally because of the threat it could pose to the so-called innovation economy many see as one of San Diego’s greatest assets.

Popular Program

The H-1B program allows U.S. companies to fill specialty positions with foreign workers for a period of three to six years. As many as 85,000 workers per year can be granted permission to work in the United States under the program. A lottery system determines which workers receive the visas.

An online database of H-1B applications, derived from U.S. Department of Labor data, shows 916 companies with San Diego addresses applied for the visas in 2016; not all of them are locally based. The median salary of all 3,424 visa applications listed was a little more than $85,000 per year.

The positions advertised ranged widely, from applications developer to biomedical engineer. They include common jobs that can be hard to fill, like accountant to high school math teacher. Many of the companies applying to hire such individuals operate in the fields of technology and life sciences.

Few Details

White House spokesman Sean Spicer told reporters Jan. 30 that Trump expects to make changes to the program by executive order and by working with Congress. He provided no details on what changes the president is looking for.

“With respect to H-1Bs and other visas, it’s part of a larger immigration reform effort that the president will continue to talk about through executive order and through working with Congress,” Spicer said, according to the Wall Street Journal.

A draft order that was apparently leaked from the White House suggests the administration wants to change how H-1B petitions are adjudicated but not necessarily adjust the number of foreign work visas issued annually, said Washington-based attorney Blake Chisam, a partner at Fragomen, Del Rey, Bernsen & Loewy LLP, a leading provider of immigration services. The firm has an office in San Diego.

Call for Consideration

Chisam said Trump has made clear on the campaign trail, during the transition to the White House and now as president that he is willing to consider curtailing the H-1B program.

“Those kinds of policies, without considered, careful vetting, could do more harm than good to the competitiveness of American businesses,” he said.

Besides creating uncertainty that would complicate business planning, he said, limiting the H-1B program would make it harder for talented people educating in the United States to remain in the country.

“We should not make them our chief export,” he said.

Main Criticisms

The H-1B program has for years been the target of criticism that it gives U.S. jobs to foreigners, and that it undermines domestic wages by allowing companies to hire people motivated by a chance to live in the country.

Some local employers who do find fault with the visa program are also skeptical about Trump’s moves to restrict domestic companies’ access to foreign workers.

MindTouch Inc. CEO Aaron Fulkerson recently sent out a staff-wide email trying to “calm my team down.” He even brought in immigration lawyers to address employee concerns after Trump’s executive order on travel bans.

Eight percent of the San Diego-based software company’s employees are in the country on visas or green cards, and two of its three top executives are foreign-born, said Fulkerson, who emphasized MindTouch has never applied for an H-1B worker visa because it “smells of indentured servitude to me.”

“We just hire the best talent we can find, and sometimes that talent is from other countries, like Mexico,” he said. He added that the companies has faced a “huge challenge” trying to find software engineers, and that the real culprit is the United States’ failure to invest sufficiently in education.

Fulkerson dismissed as “ridiculous” the notion that foreign workers drive down U.S. wages. He asserted technology-driven automation is the real culprit hurting the domestic labor force.

‘Tool for Immigration’

Noori Barka, the Iraqi-born owner and president of Calbiotech, a life science products manufacturer based in El Cajon, said he has seen people use the H-1B inappropriately, as a “tool for immigration, basically.”

“Many people come through the program. They are not skilled, just to be honest,” he said. “It shouldn’t be like that.”

Overall he sees the visa program as a valuable way for U.S. companies to bring skilled people into the local economy “to enhance our system.”

“We have to use it for the right thing, for the right people, for the right skills,” said Barka, who left school in Belgium in 1986 to come to the United States on an H-1B visa. After working for 12 years at a Santa Monica clinical laboratory, he started Calbiotech, which now has 45 employees.

Half a dozen San Diego companies that applied for H-1B visas last year did not respond to requests for comment. One that did reply, medtech giant Illumina Inc., applied for 58 visas under the federal program in 2016. It declined to comment.

Different from manufacturing

Genben, the nutritional genomics company that hired the former University of Texas graduate student while he was on a student visa, now employs six people. Half of them, including founder Shen, are Chinese-born. She said never before had the company filed for an H-1B visa.

She said foreign workers who perform low-paying manufacturing work probably don’t benefit the U.S. workforce, and so Trump’s moves to reform the immigration system won’t hurt local companies. But it’s different for specialized workers who are harder to find.

“For the higher-end, scientific, highly trained scientist professional, I don’t think Trump will (make policy changes that are) bad,” she said.

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