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Why Business Schools Want More H-1B Visas

Indian students

Part of a series on the U.S. job market for international MBAs

Part of a series on the U.S. job market for international MBAs

America’s H-1B visa system for degree-holding foreign citizens is “broken,” the country is losing top MBA talent to other nations, and the cap on visas needs to be eliminated or jacked way up. But politicians have hijacked the H-1B, corporations have abused it, and reform is unlikely anytime soon.

So say officials at America’s top business schools.

“We have all this talent. We have hundreds of thousands of international students in the United States who are tremendous assets in our economy. They’re helping our economy grow. And Congress has not increased the H-1B cap,” says Harvard Business School career and immigration advisor Kurt Piemonte. “The real issue is our Congress and our system that is broken. It’s inexcusable. I don’t see anything positive happening. We’re so far behind in competing with the rest of the world.”

The H-1B visa has become a political flashpoint, drawn into the chaotic debate over immigration, and demonized by recent reports that major U.S. firms have used it to replace American workers with cheaper foreign hires. But while business school administrators typically shy away from publicly staking out strong positions on politically charged issues, nearly every school official interviewed by Poets&Quants had no qualms about calling for reform of the lottery-based H-1B system, in which MBAs face steadily worsening odds of getting one of the 85,000 visas.

Kurt Piemonte, Harvard Business School

Kurt Piemonte, Harvard Business School

“This is just not a reasonable number,” Piemonte says. “A lot of international students just go home because there are more opportunities in emerging markets. We do not have enough talent in this country to keep our economy going. The only way to do it is to increase the number of foreign workers. They are a huge asset.”

APPLICATIONS SURGE FOR MBAS’ VISA OF CHOICE

In the latest round of H-1B visas, awarded by lottery, U.S. immigration services received 233,000 applications from companies for the Congressionally mandated 85,000 work permits. Last year, 172,500 applications were submitted, up significantly from 124,000 a year earlier.

Meantime, U.S. schools have significantly expanded the percentage of international students in their classrooms so the need for more work visas is greater than ever. At the University of Virginia’s Darden School of Business, some 36% of the latest entering class were born outside the U.S., triple the 12% representation of 20 years ago. At Duke University’s Fuqua School of Business, MBA students with non-U.S. passports now account for 38% of the class, up from only 19% two decades ago. And at Northwestern University’s Kellogg School of Management, some 36% of the latest class is composed of international, compared to only 24% 20 years earlier.

Of course, immigration issues in the U.S. generate highly polarizing debate, and recent allegations that Disney and utility Southern California Edison used outsourcing companies to replace American workers with foreign H-1B employees have complicated the politics even more. Democrats join Republicans in unholy legislative alliances, none of which have so far found success. Major U.S. corporations have also banded together in pressure groups – one boasts Facebook CEO Mark Zuckerberg and Microsoft founder Bill Gates among its leaders, and wants immigration policy changes that will give companies more access to educated, skilled foreign workers; another group, pushing for similar changes, is led by titans including former Microsoft CEO Steve Ballmer and News Corp. chairman Rupert Murdoch – but also by Bob Iger, CEO of Disney, a firm now mired in allegations that it forced American workers to train foreign, H-1B-carrying replacements before being laid off.

“I’m sure there are violators out there,” Piemonte says. “But they’re not the companies that are hiring our graduate students from the United States.”

BobBruner‘OUR COUNTRY IS FORGOING EXCELLENT TALENT FROM OUTSIDE’

Bob Bruner, outgoing dean at the University of Virginia Darden School of Business, wants to see the H-1B limit expanded, and visas tied to level of education. “Graduates of doctoral programs and master’s programs, i.e. advanced degrees, have substantially more human capital that could be of value to the United States,” Bruner says. “The H-1B visa does not recognize the distinction among applicants for the visa, either in terms of educational attainment or in terms of career potential.

“From a national policy standpoint in the United States, our country is forgoing excellent talent from outside that could make a substantial contribution to our economic performance.”

MBAs don’t belong in the same basket as the workers at the center of controversy over the H-1B, Bruner believes. “The jobs for which MBA students are being hired typically require sophisticated levels of preparation, high career potential, strong mastery of tools and skills – and the volume of American new graduates arguably is insufficient to fill the demand,” Bruner says.