Trump’s Amendment to the H-1B Visas

Lindsey Mattila (CMC ’17)

On April 18th, 2017, President Trump signed an executive order to reform the H-1B visa program. This program has traditionally been used for companies to hire highly-skilled foreign workers in tech, medical, industrial, and science fields. The United States currently admits approximately 85,000 H-1B visas annually. This executive order comes as Trump is facing a backlash from his populist-leaning voter base, who are against immigration and the outsourcing of jobs. Trump asserts that the program has been abused by American corporations who use the visas to hire foreign workers who are not only willing to work for less compensation but who are also less qualified than their American counterparts. He argues that programs that can be abused, like the H1-B visa program, are detrimental to “American prosperity,” and his reforms will put America first again. The debate over H-1B visas, however, has been very divisive, and it is not clear that this reform will have any immediate effects for the voters he was trying to please. Furthermore, beyond reaching Trump’s populist voter base, it is uncertain if this reform will have any positive benefits for the United States’ economy as a whole.

Trump claims that immigrants who use H-1B visas are driving down wages for Americans. Yet,  this is not necessarily true. It is important to remember that these immigrants are coming into high paying, highly technical positions. In addition, the Heritage Foundation reports that the United States has a shortage of jobs in the fields that H-1B visas are accepted into to. Therefore, these immigrants are not directly taking job opportunities for Americans. In fact, their presence in companies may actually create more jobs for Americans, and they generate an immense amount of tax revenue. One report estimates that if these visas were increased to 195,000 per year, tax revenues would increase by $69 billion over 8 years. It is important to note that this program already has many legal safeguards in place to ensure that these visas do not drive down wages for Americans. For example, immigrants who come to work in the United States with this visa must be paid a minimum of $60,000 annually. In addition, the employees must file a Labor Condition Application that proves that the immigrant is not being paid less than employees in a similar job in the same geographical area. Companies must also prove that they tried to hire an American prior to filing for the visa, or they must prove that there are not any qualified employees in their region.

On the other hand, some experts argue that the H-1B visa drives down income for native-born Americans because of the lack of mobility offered to these workers. Because H-1B visas are sponsored through an employer, each granted visa is tied to a specific job at a specific company. This makes it very difficult to move jobs as the immigrant would need to go through the whole application process again to get a new visa with a new employer. Thus, H-1B visa employees are stuck and have less bargaining power. Since they are not allowed to negotiate to work for higher pay, some argue that they naturally will be paid less than their American counterpart. These experts argue that this state of affairs make H-1B employees very appealing, even beyond the fact that they fill employee shortages. Another study found that native-born Americans are stronger employees, which they exemplify in the statistic that more Americans file for patents than do their foreign counterparts. The Trump administration has not released specific changes that they want to see in this visa program, but officials have said they are considering raising the minimum annual salary to be qualified, raising the educational attainment levels, and raising application fees.

Trump may be cognizant of the strengths and weaknesses of the program. So far, he is essentially calling for the program to be strengthened by ensuring that companies hire only the highest skilled and highest paid workers, and only in the event that there is truly a shortage of American employees. This will better protect the highest skilled American workers from having their jobs outsourced overseas, but this change does not necessarily fill his promise to protect the average, middle-class American worker from foreign job competition. While this may appease his populist following in the short-term, Trump will need to find reforms that are geared more toward the middle-class worker.

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