Greater availability of recent foreign graduates in Washington and New York may have played a role in Amazon’s decision put its second and third headquarters operations in those cities, passing over other top-20 metro hopefuls like Atlanta.
Reports have speculated that the expected challenge of finding talent drove Amazon’s last-second decision to split its planned 50,000-job East Coast megahub between New York’s Long Island City and Crystal City, Va., just outside Washington.
It would have been hard for any single city, the reasoning goes, to supply that much tech talent, especially without disrupting existing tech ecosystems.
Rajeev Dhawan, who runs the Economic Forecasting Center at Georgia State University’s Robinson College of Business, said in his quarterly conference Wednesday that Atlanta’s chief technology officers must have breathed “a collective sigh of relief” at the news that the tech giant was taking its massive investment elsewhere.
“The kids working at startups and tech companies, they were going to get poached,” Dr. Dhawan said, noting that Amazon, whose market capitalization briefly hit $1 trillion in September before falling to $800 billion today, could lure tech workers with stock options smaller firms couldn’t match.
In the meantime, Amazon and other tech giants have been turning to another source of talent in a tight job market: foreign graduates, Mr. Dhawan said, citing new U.S. immigration data revealed recently in the Wall Street Journal.
The newspaper reported that 433,556 foreign graduates last year — about half of the total — stayed in the U.S. under what’s called the Optional Practical Training program, or OPT, which provides a year of work authorization as they seek a company-sponsored visa. STEM graduates in fields like engineering and computer science can apply for an exemption that lengthens their stay by two more years. More than half of OPT students specialize in STEM fields, and 57 percent of them come from the three top nations sending students to the U.S.: China, India and Korea.
Dr. Dhawan said this is where corporations, especially the tech giants, are finding skilled workers amid one of the toughest labor markets in history.
“This is that hidden release valve that’s coming in,” Dr. Dhawan said.
The number of STEM grads staying in the U.S. has grown by a factor of five since 2008, when then-President Obama first extended the length of authorization for STEM graduates.
Much of that increase came after a second Obama extension in 2016, which also brought the election of Donald Trump and tougher requirements for the H-1B temporary work visa primarily used by companies to recruit programmers and other skilled staff from overseas. This year, H-1B applications exceeded the quota by a ratio of more than two to one, so all the slots were awarded by lottery.
Robert Johnson, an immigration attorney at the law firm of Baker Donelson in Atlanta, said companies have come to lean heavily on the OPT program.
“The tech industry lobbied hard for the OPT STEM extension. President Obama gave it to them as a way get around new H-1Bs, which we couldn’t get through Congress. It was a gift to Facebook, Amazon and Google and Silicon Valley,” Mr. Johnson told Global Atlanta.
He said the OPT doesn’t have to adhere to the same rules as the H-1B, for which the Department of Labor requires proof that companies pay the foreign worker a “prevailing wage” in the field to ensure they’re not simply importing cheaper labor.
In tech fields, underpayment under the OPT program isn’t a problem, Mr. Johnson said.
“It’s tough not to pay these guys the market rate because of the demand that’s out there,” he said.
But other grads might not be so lucky. It’s not as common today, but companies in the past have asked Mr. Johnson about bringing on foreign grads as unpaid interns.
“You do see the students being taken advantage of, because they’re desperate. Employers pay them half of the prevailing wage, promise to file an H-1B, and then they don’t. ” Mr. Johnson said. “The big bonus for companies is that they get to employ them while they play the H-1B lottery.”
Additional data confirm that New York and DC are hotbeds for foreign graduates, far exceeding the pool of cities like Atlanta.
According to the Pew Research Center study tracking data from 2004-16, 84 percent of foreign graduates in the New York metro area stayed there for post-graduation training periods. At 218,400, the city has far more OPT workers than any other city. Los Angeles was in a distant second with 103,600.
With 60,800 OPT workers, the Washington metro area sat at No. 6 behind Boston, San Francisco and San Jose/Sunnyvale.
Atlanta, meanwhile, had just 20,500 OPT workers, though the city performed well in terms of keeping graduates and attracting new ones. It retained two-thirds of foreign graduates and posted a net inflow, potentially thanks to the city’s healthy technology industry growth.
According to the annual Open Doors Report by the Institute for International Education released Nov. 13, the number of international students enrolled in U.S. institutions grew by 1.5 percent to a new high of 1.09 million last year. That number is flattening after many hyears of rapid growth.
Many institutions said they were most concerned over visa denials and policy changes under the Trump administrationthat have left potential applicants and current students feeling unwelcome and uncertain, according to the institute’s annual enrollment survey. Fall enrollments were down 1.7 percent in November 2018, though the number of students pursuing OPT authorization was up 7.1 percent.
GSU-CIBER is the presenting sponsor of Global Atlanta's Education Channel. Subscribe here for monthly Education newsletters.
