The H-1B visa program is changing and those changes will likely have very real implications for all Americans. Under the program, which has been in place since 1990, U.S. companies bring highly skilled foreign workers to the United States. Now, the cost of bringing those workers is about to go sky high. Currently, each visa costs a nominal amount, but according to the White House, that price will soon be $100,000 per visa. Critics claim that the program is simply a mechanism for companies to hire cheap foreign workers rather than more expensive domestic workers. U.S. companies, especially those in high tech, disagree. They argue that the policy is essential to their ability to hire the workers that are often critical to their R&D efforts. Indeed, despite a bigger emphasis on STEM fields in recent years, companies say that the United States still falls short when it comes to having a sufficient supply of high skilled labor, leaving them with little choice but to look for qualified workers outside the United States. Indeed, this is one of the reasons why the new policy could have widespread implications for all Americans.

While the intention behind the extraordinary increase in the price of the visa may have been to encourage companies to hire more American workers, it could ultimately mean that U.S. firms will still move valuable R&D outside the United States, leaving some American tech workers without jobs. Such a move would not only diminish the competitive advantage of the United States, but it could also dampen the ability of the country to attract high tech startups. In Silicon Valley for example, H-1B visa holders work side-by-side with Americans, leading the world in cutting edge technology. The huge number of high tech firms in Silicon Valley reflects the ability of those companies to optimize the economies of scale and scope that comes with the concentration of a highly skilled workforce.

If companies are unable to gain those efficiencies, they could choose to reduce their U.S. presence or leave the country all together. This of course, would be detrimental to not only U.S. tech workers, but to the country as a whole. At the minimum, the new cost of the visas will likely be reflected in higher prices for consumers, and/or diminished productivity, neither of which benefits the U.S. economy. Beyond Silicon Valley and other high tech areas, the change in the visa policy will also be evident. Many H-1 B visa holders work in medicine. If the high cost of the visas prevents hospitals and clinics from accessing the personnel they need, patients will almost certainly face longer waiting times for health care and possibly see clinics, especially in rural areas struggle to remain open. For now, details on the changes to the program remain unclear, but the announcement that changes are on the way has created new uncertainty for vias holders and those that depend on them.    

 

Discussion Questions:

  1. What factors drive the popularity of the H-1B visa program among U.S. tech companies, and how does it influence their access to global talent, wage structures, and competitiveness in the technology sector?
  2. How does the increase in H-1B visa costs affect the economic decisions of U.S. tech companies regarding hiring practices, wage structures, and reliance on foreign talent? What broader impacts might this have on the U.S. labor market and economic growth?