The Trump administration has introduced a new fee of $100,000 for foreign employees seeking H-1B visas, aiming to encourage companies to prioritize hiring Americans over foreign labor.
However, economists predict mixed outcomes, suggesting that while some industries may see increased domestic hiring, the long-term economic growth might experience a slowdown, subsequently affecting overall employment.
Kirk Doran, an associate professor of economics at the University of Notre Dame, highlighted that there could indeed be a scenario where domestic employees see an increase in demand for their labor. He noted, “There is some evidence that for the kind of work H-1B employees do, there are available workers looking for jobs right now.”
In the immediate future, technology workers could especially benefit as companies seek to sidestep the heightened costs associated with hiring foreign employees. Jennifer Hunt, a labor economist at Rutgers University, pointed out that native-born computer programmers may find themselves in a more advantageous position. She explained, “If you’re a native worker who is really similar to an immigrant, immigrants are usually bad for you. So we would expect current American, U.S. programmers to be helped.”
The broader implications of this policy, however, complicate the narrative. Research indicates that the employment of immigrant workers can be advantageous for companies, as these international workers often bring specialized skills that may not be readily available among native candidates.
A 2024 study by the IZA Institute of Labor Economics analyzed the influence of U.S. immigration on employment, concluding that H-1B workers can facilitate increased company growth, thereby elevating overall employment levels, revenues, and survival rates of businesses. The study found no evidence of native-born worker displacement due to the hiring of foreign labor. According to the research, every H-1B worker employed contributes to additional job creation, suggesting that high-wage, high-productivity firms tend to thrive and even create more opportunities for educated natives when they can incorporate H-1B talent.
George Mason University economics professor Michael Clemens emphasized that skilled H-1B workers play a vital role in boosting corporate revenues and profits. He also indicated that this increased profitability could ultimately lead to more job creation in areas such as sales and marketing, positions that could then be filled by U.S. workers.
Conversely, Clemens voiced concerns that the policy in question could ultimately undermine American job prospects in the long run, suggesting that it could restrict opportunities for those it intends to help.
The implications of immigration restriction are broad, according to Gaurav Khanna, an economics professor at the University of California San Diego who specializes in migration. He articulated that, on balance, immigration benefits U.S. workers more than it harms them, arguing that the economic advantages surpass any potential downsides. Khanna explained that the H-1B program has historically allowed IT companies to expand, subsequently creating more job opportunities within these firms, including management and human resources roles.
In sharp contrast, the White House has dismissed the notion that hiring foreign workers benefits American laborers. White House spokeswoman Taylor Rogers stated in a message to CBS MoneyWatch, “President Trump continues to prove to so-called ‘experts’ wrong time and time again – no ‘economic study’ can change the reality lived by many Americans across the country who bore the brunt of the massive abuse of the H-1B system.”
Rogers reinforced that the new fee serves to protect native workers from competition with “cheap, foreign labor.”
President Trump stated that H-1B visas put American workers at a disadvantage, permitting companies to exploit the system to replace native employees with less-skilled, lower-paid workers. This practice, he asserted, has suppressed job opportunities and affected wage growth adversely.
Supporting this assertion, an analysis released in August by The Heritage Foundation, a conservative think tank, indicated that H-1B workers often earn considerably less than their American counterparts. It stated, “[M]any employers may be using the H-1B program not to attract top-tier global talent, but to fill roles at below-median wage levels—raising questions about the program’s alignment with its stated objectives.”
Additional modifications to the H-1B program may be on the horizon, with the Trump administration suggesting a shift from a lottery system to one that would favor high-skilled, higher-income immigrants.
The Heritage Foundation’s analysis also pointed out the limitations faced by visa holders, tying them to specific companies and restricting their ability to seek alternative employment. This situation can render such workers more appealing to employers compared to native workers who have the flexibility to change jobs. Alexander Frei, the author of the report, remarked that this dynamic creates an uneven playing field, where employers may prefer visa-bound workers who accept lower wages and demands over native workers, thereby diminishing the bargaining power and wage growth potential for equally qualified U.S. counterparts.
Critics of the H-1B program argue that it disproportionately benefits large multinational corporations capable of submitting numerous applicants to the visa lottery, thus securing access to a robust labor pool of foreign workers while sidelining American professionals.
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