A Look at the Trump Administration’s Recent H1B Visa Policy

The Trump Administration has proclaimed a change to the H1B visas with the goal to help prevent this visa’s abuse. The change requires a $100,000 payment to accompany any H1B visa petitions. Although the Trump Administration’s aim is correct, their remedy is incorrect. The payment barrier will not stop the current abuses. The payment barrier will stop this visa program from doing what it was intended to do: get the best and brightest to stay and work in the United States. 

H1B visas allow employers to hire non-American workers for specialty occupations. This visa is most common in tech, engineering, medicine, and academia. It is an employee-sponsored visa that is valid from 3 to 6 years, subject to an annual cap, and can be a pathway to permanent residence if the employer chooses to sponsor a green card. This visa program was started in 1990 to address labor shortages in specialized areas. The idea behind the program was that non-Americans would fill roles that there were not enough Americans to fill. It would be a meritocratic visa that would allow people with abilities that no American had to come over and work. In short, it was supposed to bring the best and brightest to the United States for roles that we could not fill ourselves.

The program has not been used this way. Big tech has abused H1B visas to get cheaper labor. While these companies cut down on overhead and wages, they also cut down on American jobs. Typically, what happens is that there will be an American software engineer who is doing the work they have been asked to do. Then the company will hire foreign workers, usually from India, on an H1B visa. The American engineer will be told that they are getting let go, but that they have to train the new workers before they leave. The American engineer must sign an NDA and agree to train the workers or they will not get their severance package. Once the new workers are trained, the American worker is let go. Then the new trained workers work in the United States until their visa expires. When their visa expires they go back to the country they immigrated from, but they are not fired by the company. When they go back, they take the job with them. Therefore, not only is one American being replaced by foreign workers, but their job is being offshored, so an American will never hold that job again. 

The H1B program has been used as a way to offshore American jobs so that tech companies can have cheaper labor. This visa was created to get the best and the brightest, yet it is being used to get people who will work for less than Americans. So, Trump is right to try and combat this. One main goal of his administration is to bring jobs back to the United States, and stopping this abuse would be one way to onshore jobs. However, creating a $100,000 barrier for companies to get employees on H1B visas will not solve this issue. 

Companies save a lot of money from offshoring jobs. It is estimated that a small company with five engineers can save $300,000-$500,000 a year by offshoring their engineering jobs. Therefore, a $100,000 price tag is not a huge investment for big companies to make to cut their overhead in the long term. Nevertheless, it will affect other industries. Big tech is only one of the industries that benefits from H1B visas, medicine and academia also benefit from these. It does not seem as reasonable to ask a hospital or university to pay the $100,000 to bring in freshly graduated talent. This will give Americans more job opportunities, but we may lose some highly skilled workers that are American educated. With this new role, students can be educated at an American college using student visas, yet if they cannot find a company to pay for the petition they will have to go back to their home country: this is a ton of American trained talent sent away from America. It is additionally unreasonable to expect the hospital or university to pass that price tag onto the incoming worker. This would be extremely unappealing to workers, and would likely result in them choosing to go back to their home country.

Another major industry that may be affected by this is the start up ecosystem. America benefits hugely from the best and brightest coming to our university systems and then deciding to stay in the United States. Some of these people have gone on to start huge companies that have helped make America into the innovation capital of the world. However, now we face a situation where if these people cannot get a company to pay $100,000 to sponsor their work, then they will be forced to go back to their home country. This could lead to other countries having major companies that could have been started in the United States if we gave their founders the opportunity to stay here. 

The Trump Administration is attacking the right issue. Yet, their solution is throwing out the baby and keeping the bathwater. Their solution does not do anything to address the abuses that are taking place, and if anything makes those abuses more likely since there is now a higher barrier to entry to these visas, big companies can grab a larger share of the annual cap. Their solution also hurts American medicine, academia, and innovation. When this visa was created, the goal was for America to get the best and brightest to this country to help us move forward. The best and brightest seem to be the people who will be pushed away most through the new petition price. The Administration has the right idea, but wrong execution. This is a repeated trend we are seeing with the Trump Administration, taking a short term monetarily pay win, despite the fact that the legislation itself is not effective to address the actual issue.