A government program that allows foreign students to stay and work in the country after graduation has grown rapidly over the last few years and has even surpassed the H-1B visa program for highly-skilled workers, according to a recent report by Pew Research.
The report shows over 257,000 foreigners were authorized to remain and work in the United States in 2016 through the Optional Practical Training program, which was created by former President George W. Bush for F-1 student visa recipients. Student visa holders may apply for OPT employment authorization before or after graduation. The standard authorization allows these foreign students to work in the United States for one year. Students in STEM fields may be authorized to work for three years.
Several media outlets like the Wall Street Journal and the Los Angeles Times reported on the program’s growth last week, but they left out an interesting fact: employers are incentivized to hire these foreigners over American citizens because they receive a tax exemption for doing so. Employers save money by hiring non-citizens over citizens because they are not subject to payroll taxes for these workers.
An analysis by the Center for Immigration Studies explains that employers receive a tax exemption of 8.25 percent (Social Security, Medicare, and federal unemployment insurance) for hiring OPT recipients over Americans. Assuming employers are faced with hiring two equally talented STEM majors at approximately $60,000 a year, hiring the foreigner would save the employer approximately $14,850 over the course of three years, which is the length of time of a STEM OPT authorization. Assuming all 257,064 OPT workers earn a salary in a similar monetary range, the total payroll tax exemption results in billions of dollars in losses to the nation’s entitlement trust funds.
Sadly, it’s therefore no surprise that the pro-business Wall Street Journal and the pro-immigration Los Angeles Times conceal this foreign hiring incentive. One would think that a U.S. government program encouraging job discrimination against American citizens would be relevant to these media outlets. It’s astounding that it has received no coverage.
Employers aren’t the only beneficiaries of the OPT program. U.S. schools benefit as well. Colleges and universities can promote the possibility of employment after graduation as a means to attract more foreign students, who pay a higher tuition rate than American students. Additionally, as the Wall Street Journal pointed out, some schools like Columbia University and Yale University have expanded the definition of STEM to include finance and economic degrees so that students in these majors may benefit from the extended OPT authorization.
Pro-immigration activists defend the OPT program like they do the H-1B visa program. “We need these workers,” they say. “They’re skilled and they make us more competitive in the international job market.”
At the very least, these claims are insulting as they imply American students aren’t skilled enough, or that they aren’t studying in the STEM fields – both of which are untrue. However, their arguments are beside the point. Just because businesses want skilled workers doesn’t mean the government has to incentivize hiring foreigners over its own citizens. Why can’t the program be changed to eliminate the incentive, making it just as expensive to hire the foreigner as the American? In fact, perhaps there should even be a tax for hiring a foreigner over an American.
If the Trump administration’s actions on immigration matched President Trump’s own rhetoric, this program would’ve been scrapped a long time ago. Unlike most other immigration programs created by the executive branch, the Trump administration has quietly defended the OPT program to ensure its survival. While there have been reports on increased scrutiny of skilled workers, his administration has maintained the status quo.
It’s my hope that more Americans become aware of the OPT program, especially those whom it most affects: American college students and recent graduates.
Trump ran on creating a merit-based immigration system. I support skilled and legal immigrants over unskilled illegal immigrants, however, that does not mean I support their incentivized employment prospects at my own expense and at the expense of my fellow American citizens.
OPT workers have the benefit of living and working in the greatest country in the world. Despite the fact that they are ineligible to receive the benefits, they should be forced to pay into our social programs or face the total elimination of the OPT program altogether.
Mr. President, if you care about the American workers of the next generation, I implore you to examine the OPT program and remember one of your central campaign pledges: America First.
