Options Memo

The Trump administration’s actions towards immigrants, or non-American born peoples has been starkly conservative, and is regularly accused of being discriminatory. This author has looked at the most recently applied change in rules for the H-1B visas and will be outlining several options which would result in a similar benefit for the American workforce, without being stark anti-immigrant. 

Current H-1B Visa Rules

The changes to the H-1B visa that took effect on Thursday October 9th, 2020, were intended as a means of protecting the American workforce, by raising the standards with which foreign workers are held, so employers are unable to short-sell foreign workers in lieu of an American employee (The Trump Administration Is Taking Action to Tighten Foreign Worker Visa Requirements and Protect American Workers 2020). The changes raise the wages foreign workers must be paid in order to qualify for a renewal of their H-1B, “narrow the degrees [which] qualify an applicant and shorten the length of visas for certain contract workers” (Hackman 2020). While the changes are intended to protect American jobs, they come in tandem with a freeze on new visa applications for many types of visas and will leave many people unqualified for renewal if and when applications are processed again. 

Costs: The cost to the current course of action is the risk of many tech-sector jobs, who have long employed highly skilled workers from India in firms like Google and Facebook. By some estimates, encouraging and actually expanding the H-1B visa program promotes both innovation and productivity for the tech sector (Nowrasteh, 2020). 

Benefits: The current changes are expected to “These critical reforms will improve the quality of the H-1B program without changing the annual statutory cap for H-1B visas” (The Trump Administration Is Taking Action to Tighten Foreign Worker Visa Requirements and Protect American Workers 2020). 

Option 1

The changes to the H-1B visa system are intended to protect the American workforce but seeks to achieve this by preventing a competitive workforce. In the spirit of capitalism, to promote the American workforce as well as capitalist competition, the creation and/or expansion of federal tax relief programs which grant tax breaks to major tech-companies who employ American workers. 

Costs: This option would be difficult to engage and would require strict regulations and oversight in order to ensure its structure would not be abused. The Department of Labor would need to create strict guidelines regarding number of American v.s. foreign laborers, data which could take well into another presidential administration to fully enable. 

Benefits: This option would provide incentives for American industry to employ American, while maintaining more equitable rules for foreign workers. As the H-1B visa largely employs former students as they transition from their student visas, to the H-1B, and later to Green Card status. 

Option 2

The adjustments to the H-1B visa program are under scrutiny from Silicon Valley because they’re the policy equivalent of ripping a band-aid off before the wound heals. The changes are drastic, and their implementation is happening faster than many are able to adjust for (Nowrasteh, 2020). Simply adjusting the visa rules less drastically would likely achieve similar results without being as catastrophic on foreign workers. One of the major criticisms of the changes are that the rates which are being required for foreign workers are allegedly based on flawed methodology and faulty economic theory (Baron, 2020). If previous wages were kept closer to the 17th or 67th percentile, a dramatic hike of 28% in wages is unsustainable. Instead, a raise of 15% in wages, while still a massive change, would be more sustainable for major industries. 

Costs: A 15% raise in wages for foreign workers would still be a tremendous strain on American industry and would likely still cause a number of talented foreign workers to apply for jobs in Canada or the UK. Without further data, the math employed in this change is faulty at best and would still potential push foreign students (and their accompanying innovation) to other major industrialized nations. 

Benefits: This option would reward foreign workers with better pay for their work incentivizing them to bring their innovation to the US. There is supporting data which shows H-1B workers from India alone, raised American wages by $431 million in 2010 (Khanna, G., and Morales, N., 2020). Raising the wages of foreign workers would both encourage companies to hire American, without creating unnecessary hurdles for employing foreign workers.

References

Baron, E. (2020, October 18). H-1B visa pay boost: Historic win for foreign workers or ‘mess’ doomed to fail? Retrieved October 19, 2020, from https://www.mercurynews.com/2020/10/16/h-1b-visa-pay-boost-historic-win-for-foreign-workers-or-mess-doomed-to-fail/

Hackman, M. (2020, October 07). Trump Administration Announces Overhaul of H-1B Visa Program. Retrieved October 19, 2020, from https://www.wsj.com/articles/trump-administration-announces-overhaul-of-h-1b-visa-program-11602017434

Khanna, G., and Morales, N. (December 2018). The IT Boom and Other Unintended Consequences of Chasing the American Dream. Retrieved October 19, 2020, from https://poseidon01.ssrn.com/delivery.php?ID=888113013007024120115120009102018094032059000085054054113127088097111084097125123075026050063104107058097100080067012025030116058039008069063023024098120091012085105091003063003066004082124122089005117082117022084071068007121097003118090007116098003121&EXT=pdf

Nowrasteh, A. (2020, May 15). Don’t Ban H-1B Workers: They Are Worth Their Weight in Innovation. Retrieved October 19, 2020, from https://www.cato.org/blog/dont-ban-h-1b-workers-they-are-worth-their-weight-patents

The Trump Administration Is Taking Action to Tighten Foreign Worker Visa Requirements and Protect American Workers. (2020, October 06). Retrieved October 19, 2020, from https://www.whitehouse.gov/briefings-statements/trump-administration-taking-action-tighten-foreign-worker-visa-requirements-protect-american-workers/

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