US Tech Is Increasingly Dependent On Foreign Students

Non-US students pursuing STEM degrees far outpace their American peers, making big tech in the US increasingly reliant on foreign graduates to fill their ranks.

This will also spur those companies to locate new offices and expand hiring outside the US. JL

Kira Tebbe reports in OneZero:

The number of international students in master’s and doctorate STEM (science, technology, engineering and math) programs has grown so much that despite 7% of bachelor’s STEM degrees being awarded to international students, over 50% of master’s and doctoral STEM degrees are earned by international students. Although the number of available H1-B visas has remained fixed, in 2019, Facebook, Apple, Amazon, Microsoft, and Google  were collectively granted 27,000 H1-B visas, over 30% of the total available to companies. 8% of Facebook’s workforce is on an H1-B visa. 62% of H1-B visas are given to those with a master’s or doctorate degree.

OnJuly 6, the U.S. Immigration and Customs Enforcement announced a rule change that would have barred international students from staying in the country if their classes moved entirely online due to the coronavirus. Shortly later, MIT and Harvard University sued the agency and the Department of Homeland Security in federal court, seeking to prevent the government from enforcing the policy.

Tech companies joined the fight a few days later. In an amicus brief supporting MIT and Harvard’s case, 19 tech organizations and companies, including Google, Facebook, and Twitter, argued that they would be “harmed substantially” if international students were forced to leave the United States. The rule change was ultimately rescinded.

A closer look at Big Tech’s reliance on foreign workers and the demographics of STEM students in the U.S. reveals why tech companies were quick to oppose the change. Not only do foreign workers continuously support tech companies, but the number of international students in master’s and doctorate STEM (science, technology, engineering and math) programs has grown so much in recent years that they now earn more than half of all degrees conferred.

Sponsoring international technical workers has been integral to the growth of top tech companies. The most well-known way companies hire foreign workers is the H1-B visa, a three-year work visa for a “specialty occupation” that requires a minimum of a bachelor’s degree. Since 2006, the cap for the available number of H1-B visas has been set to 85,000: 65,000 for those with at least a bachelor’s degree and an additional 20,000 reserved for applicants with at least a master’s degree from an American university. While there are various exceptions, such as employees at universities or nonprofit organizations, private companies are subject to the cap. This cap has made the H1-B visa petition process increasingly competitive; the quota has been filled within four days for the past six years.

Although the number of available H1-B visas has remained fixed and competitive, the top tech companies have managed to win more and more each year. In 2019, five top tech companies — Facebook, Apple, Amazon, Microsoft, and Google — were collectively granted nearly 27,000 H1-B visas, over 30% of the total visas available to private companies.

Amazon has seen the most explosive growth in H1-B visas (from 523 in 2010 to 8,585 in 2019), although this is likely due to their meteoric growth in overall workforce size. While Microsoft held nearly seven times as many H1-B visas as its peers a decade ago, they now rest in the middle of the pack.

As tech companies’ use of H1-B visas has risen, so too has the size of their overall workforce. The directionality is unclear — did they seek out foreign workers to fill talent gaps from the American population, or did their use of foreign workers allow them to grow in the first place? Regardless, comparing both the yearly workforce size and H1-B usage shows us that the top tech companies have a steady or growing reliance on foreign talent. In 2019, nearly 8% of Facebook’s overall workforce was on an H1-B visa.

It’s not only that tech companies have a growing reliance on foreign employees — the American universities creating these soon-to-be technical workers are seeing a growing number of international STEM students.

On the undergraduate level, American students dwarf international students in numbers, about 20 to one. The same holds true for students pursuing a STEM degree: Only 7% of STEM Bachelor’s degrees at American universities are awarded to international students. However, the number of international STEM undergraduates is growing more rapidly than that of their American peers. In recent years, the growth rate of American college students graduating with STEM degrees has hovered around 5%; for international college students, that rate has grown to nearly 18%.

This disparity in STEM degrees is much more stark, and important, at the graduate level. International students are pursuing more graduate STEM degrees than American students. Despite only 7% of bachelor’s STEM degrees being awarded to international students, over 50% of master’s and doctoral STEM degrees are earned by international students. This was not the case before 2015 — only a recent surge in the number of international students pursuing graduate STEM degrees led to the majority to switch.

What does this mean for tech companies? On the bachelor’s level, tech companies have more flexibility in filling their recruiting needs without visa sponsorship. However, tech companies seeking to recruit those with graduate degrees cannot, and do not, rely on American students alone. According to a report from U.S. Citizenship and Immigration Services, despite only 31% of all STEM degrees awarded being on the graduate level, nearly 62% of H1-B visas are given to those with a master’s or doctorate degree.

Overall, there have been initiatives on various levels to produce more STEM degrees out of American universities. A 2012 federal report called for 1 million additional bachelor’s STEM graduates over the next decade to meet demand from the labor market. Tech companies would benefit from more candidates on the undergraduate level, but the real improvement in recruiting would be reducing barriers to tapping into the large and growing market of international graduate students. Both increasing the annual H1-B cap and avoiding xenophobic policies that make the lives of international students difficult would allow tech companies to hire talented graduates to support and further their growth.