Setting The Record Straight On Optional Practical Training
Attacks against Optional Practical Training (OPT) show opponents of immigration generally are also against admitting international students to the United States. To gain experience in a chosen specialty, international students can work on Optional Practical Training for 12 months, usually after graduation, or up to 36 months in a science, technology, engineering and math (STEM) field. International students, particularly in STEM fields, are among the most highly-sought potential immigrants in the world, and without OPT, America would almost certainly lose more international students to Canada and elsewhere.
No Evidence International Students on OPT “Take” Jobs From U.S. Students: At a recent House hearing (July 13, 2021), Rep. Tom McClintock (R-CA) argued that Optional Practical Training prevents U.S. students from obtaining jobs. He offered no evidence to support this assertion, and for a good reason: The evidence does not exist.
Madeline Zavodny, an economics professor at the University of North Florida and a former economist at the Federal Reserve Bank of Atlanta, examined nearly a decade’s worth of data on the Optional Practical Program and found no adverse effects on U.S. workers. “There is no evidence that foreign students participating in the OPT program reduce job opportunities for U.S. workers,” concluded Zavodny in a study for the National Foundation for American Policy. “The relative number of foreign students approved for OPT is negatively related to various measures of the unemployment rate among U.S. STEM workers. A larger number of foreign students approved for OPT, relative to the number of U.S. workers, is associated with a lower unemployment rate among those U.S. workers.”
An economic analysis released by Business Roundtable (BRT) also examined Optional Practical Training. The analysis found restricting OPT would reduce the number of jobs available in the United States. The BRT report concluded a 60% reduction in international students in Optional Practical Training would result in a loss of 443,000 over the course of a decade, “including 255,000 jobs held by native-born workers.”
Rep. McClintock argued that international students prevent U.S. students from getting jobs because employers do not pay Social Security taxes for OPT participants. Anti-immigration organizations commonly offer this argument against Optional Practical Training. But there is no evidence that OPT prevents U.S. students from being hired by U.S. companies. OPT lasts only 12 months, which means these “jobs” are essentially internships.
MORE FOR YOU
There is no guarantee an individual on OPT can gain an H-1B petition to permit longer-term employment. Even the additional 24 months on STEM OPT is a short-term assignment rather than a permanent job. STEM OPT requires employers to undertake obligations similar to those applied to H-1B visa holders. International students are ineligible for the Social Security program unless they are employed in the U.S. and are outside of a 5-year exemption period under U.S. law.
U.S. tax law exempts F-1 students from F.I.C.A (Federal Insurance Contributions Act) for the first 5 calendar years they are present in the United States. This is not a conspiracy to aid employers, as implied by some immigration critics.
“My experience with preparing tax returns for individuals in STEM OPT is that many of them become U.S. tax residents (and become subject to F.I.C.A.) as they exceed the 5-year exemption period from counting days of U.S. presence, and they have taken steps to stay in the U.S. beyond the expiration of their status,” said Arthur R. Kerr II, an attorney specializing in international and domestic taxation at Vacovec, Mayotte & Singer LLP, in an interview. “Once an F-1 student becomes a tax resident and subject to F.I.C.A., he or she also is able to take advantage of the standard deduction and lower his or her income tax. The loss of the F.I.C.A. tax exemption is often offset by a more favorable income tax deduction.”
In the face of data showing an enormous number of job vacancies in computer occupations in the United States, the argument foreign nationals have prevented qualified U.S. workers from landing tech-related jobs is today even less supportable. The unemployment rate in math and computer occupations was 2.2% in June 2021, according to the Bureau of Labor Statistics, and there are more than 1 million job vacancy postings in computer occupations in America, about 20 times the number of new H-1B petitions approved in computer occupations for companies each year. (The labor market is not zero-sum. Highly educated professionals are likely to facilitate employment for other professionals.)
Canada and Other Countries Have More Generous Programs for International Students: Canada’s program for graduating international students is more generous than in the United States, according to Peter Rekai of the Toronto-based immigration law firm Rekai LLP. That means any new restrictions will make it even more likely international students will choose Canada (or other countries) over the United States. The number of Indian students at Canadian universities more than doubled between 2016 and 2018, while at the same time Indian students at U.S. universities declined.
After graduating, international students in Canada become eligible for a three-year post-graduation work permit. (See my testimony at a recent House hearing for more background.) After a minimum of one year of skilled employment in Canada, international students receive a significant benefit through the points system to gain permanent residence. In some provinces, there are programs (with numerical limits) that allow foreign nationals with a master’s or Ph.D. from a Canadian university to gain permanent residence, including, in many cases, without a job offer.
In contrast, in the United States, more than 70% of H-1B registrations were rejected for FY 2022 due to the low annual limits under U.S. law for H-1B petitions. The wait time for an employment-based green card (for permanent residence) can last decades or longer for many recent applicants in America.
The United Kingdom has reformed its system along the lines of Canada’s student work visa. The UK grants recent graduates of a UK university a visa that lasts two or three years. “The Graduate Route was announced as an immigration path to attract talent in the STEM sector,” notes the Fragomen law firm. “The policy change follows the announcement of a new Global Talent Visa, which was also aimed at recruiting the ‘brightest and the best’ talent across the world in the STEM sector, in response to growing concerns that this sector would be disproportionately impacted after Brexit.”
OPT and STEM OPT are Lawful: Another common argument used by opponents of immigration is that Optional Practical Training and STEM OPT are unlawful. However, in an order on November 30, 2020, U.S. District Judge Reggie B. Walton ruled against WashTech (Washington Association of Technology Workers) in its lawsuit that sought to declare OPT and STEM OPT (the regulation issued in 2016) illegal. (WashTech has appealed the final judgment to the U.S. Court of Appeals for the District of Columbia.)
In an opinion issued January 28, 2021, Judge Walton wrote, “Not only does DHS [Department of Homeland Security] enjoy broad, delegated authority to enforce the INA [Immigration and Nationality Act] and issue rules governing nonimmigrants, but ‘DHS’s interpretation of F-1—inasmuch as it permits employment for training purposes without requiring ongoing school enrollment—is ‘longstanding’ and entitled to deference.’ ‘Since at least 1947, [the Immigration and Naturalization Service (‘INS’)] and DHS have interpreted the immigration laws to allow foreign students to engage in employment for practical training purposes.’” (See here for a more detailed discussion of the legal issues surrounding OPT and STEM OPT.)
Restrictionists are most known for criticizing what they call “low-skilled” immigrants. However, these same individuals and organizations also oppose the entry into the United States of highly educated people in high-demand specialties like electrical engineering and computer and information sciences. There are likely no policy concessions that would gain their support and also allow U.S. universities to remain competitive in attracting international students. It is in this context one should understand the continued opposition to Optional Practical Training and the many actions taken against international students during the Trump administration.