If ever there were poster children for the benefits of immigration, they would be the highly skilled foreign workers employed by American high-tech companies.
Their alums include the CEOs of Microsoft and Alphabet (Google), as well as entrepreneur Elon Musk. They illustrate a near-consensus that often gets lost in the heated debate over immigration: The United States has powerful competitive reasons to keep the program that brings these promising workers in. Recently, in Joe Biden’s waning days as president, the U.S. Department of Homeland Security “modernized” provisions of the H‑1B program with a new regulation aimed at greater flexibility.
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Navigating rules around immigration visas will test Donald Trump’s skill as both politician and leader, as America’s economic growth relies in part on the workers many in his base want to banish.
In the past week, however, the H-1B visa system came under attack, exposing a rift between market-friendly Republicans and those who oppose more illegal and legal immigration.
This presents President-elect Donald Trump with both a dilemma – and an opportunity. Whichever side he chooses, he risks alienating part of his base.
“At some level, Trump understands both the H-1B benefits and costs,” says Chad Sparber, an economist and director of the Lampert Institute for Civic and Global Affairs at Colgate University. “He needs to resolve that tension” among his followers.
If ever there were poster children for the benefits of immigration, they would be the highly skilled foreign workers employed by American high-tech companies. Alums include the CEOs of Microsoft and Alphabet (Google), the former head of Pepsi, and serial entrepreneur Elon Musk to name just a few.
They illustrate a near-consensus that often gets lost in the heated debate over immigration: The United States has powerful competitive reasons to keep the program that brings these promising workers in.
Just before Christmas, in Joe Biden’s waning days as president, the U.S. Department of Homeland Security “modernized” provisions of the H‑1B program with a new regulation aimed at greater flexibility.
Why We Wrote This
A story focused on
Navigating rules around immigration visas will test Donald Trump’s skill as both politician and leader, as America’s economic growth relies in part on the workers many in his base want to banish.
In the past week, however, the H-1B visa system also came under attack, exposing a rift between market-friendly Republicans who support the program and those trying to curb both illegal and legal immigration into the U.S. This presents President-elect Donald Trump with both a dilemma – and an opportunity.
Whichever side he chooses to most support while in office, President-elect Trump risks alienating part of his base. But by addressing the immigration restrictionists’ concerns about the program, he may be able to reform the H-1B system and make it an even sharper tool for attracting the world’s best and brightest to America’s shores.
“If Trump warms up to the idea of an expansion, a little reform, simplification, and deepening of the H-1B, I think that would be a very good sign,” says Giovanni Peri, an economics professor at the University of California, Davis. He “would be a force for a policy [that] could generate quite some growth.”
The tension over immigration limits broke into the open last week when Trump activist Laura Loomer attacked one of the president-elect’s new advisers for his past support for H-1B visas. Mr. Musk, also a Trump supporter, fired back in a series of posts on X, saying he would go to “war” to protect a program that helps U.S. companies stay competitive. A day later, Mr. Trump publicly backed Mr. Musk.
“I have many H-1B visas on my properties,” the incoming president told the New York Post, referring to workers at his resorts, hotels, and other businesses. “It’s a great program.”
Skilled foreign workers filled tech jobs
Most researchers agree. When the U.S. initiated the current program in 1990, companies began to use it to bring in highly skilled foreign workers for jobs that they were struggling to fill with domestic ones, especially jobs in science, technology, engineering, and mathematics (STEM).
About half of the growth in the college-educated STEM workforce is due to the increase in H-1B workers, one 2015 study found. Congress temporarily tripled the number of such visas from 65,000 to 195,000 in 2001. The program was so popular that the federal government instituted a lottery system to decide the winners.
Studies show that firms that employed these immigrant STEM workers who entered on the visa lottery got more patents. Likewise, startups with more of these workers have won more funding from high-profile venture capitalists and have been more likely to go public or get bought out. And the technology that foreign workers helped produce has made downstream industries more competitive and efficient, boosting the nation’s employment and productivity, a key to economic growth.
“Almost all Americans were better off because of this migration,” says Gaurav Khanna, an economics professor at the School of Global Policy and Strategy at the University of California, San Diego.
But problems also began to crop up. Foreign computer scientists began to push American-born computer scientists out of jobs. Because applications are chosen by lottery rather than merit, some staffing companies started flooding the system with applications for midgrade foreign software engineers willing to work for lower pay than domestic ones. In an especially notorious case in 2015, Disney fired American-born tech workers and forced them to train foreign replacements before leaving.
Higher skill or cheaper labor?
This has led to widespread suspicions – on both the left and right – that the program is a smokescreen for high-tech companies to get cheaper overseas labor.
“Most H-1B workers [are not] your superstars,” says Maria Linda Ontiveros, co-director of the Work Law and Justice Program at the University of San Francisco School of Law. “They are people who are doing important engineering work. But it’s kind of midlevel engineering work. … What the H-1B model does is it allows U.S. companies to reach out globally and bring in people who are pretty desperate to come to the U.S. … and who are willing to work for less because working for less here still translates to a huge salary back in India.”
Supporters of the program say reforms can fix many of these problems. Pia Orrenius, a labor economist at the Federal Reserve Bank of Dallas, has proposed replacing the lottery with an auction. Companies would bid how much they would pay in government fees to hire a specific person. The highest bids would get the H-1B slots.
At the end of his first administration, President Trump proposed a similar idea: Companies offering the highest salaries for a foreign worker would get the visas, points out Mark Krikorian, an immigration restrictionist and executive director of the Center for Immigration Studies.
Proposing a middle ground
In an article last week, Mr. Krikorian proposed a way that Mr. Trump could find a middle ground between his market-friendly tech supporters and his restrictionist base. In exchange for increasing the number of H-1B visas, the tech industry would support restricting, or even eliminating, other forms of legal immigration.
Such a compromise would likely be unpopular with Democrats, who point to moral and humanitarian reasons for, say, allowing current immigrants to get preference for bringing family members to the U.S.
And it will be difficult to get any reform through Congress, whose Republican majority is also fractured over immigration, says Heath Brown, associate professor of public policy at the John Jay College of Criminal Justice, City University of New York, and author of a 2016 book, “Immigrants and Electoral Politics.”
“It’s a hard problem for them to deal with because … the claims about border policy and failures of border policy often get conflated with problems in other immigration programs that have nothing to do with border security,” says Professor Brown.
But a successful reform could burnish Mr. Trump’s leadership credentials.
“At some level, Trump understands both the H-1B benefits and costs,” says Chad Sparber, an economist and director of the Lampert Institute for Civic and Global Affairs at Colgate University. “He needs to resolve that tension” among his followers.
