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With firms in the US hiring overseas talent now required to pay $100,000 annually for each H-1B visa, India-born workers—who make up over 70 per cent of all H-1B beneficiaries—could be the hardest hit. Now, technology companies in the US, including those headquartered in India, like Infosys and TCS, will find hiring through the H-1B programme far less attractive.
The latest move by the Donald Trump administration is no surprise—less than a month ago, US Commerce Secretary Howard Lutnick called the popular programme a “scam”, saying that American businesses should be focused on hiring American workers instead of foreigners. Lutnick’s views are shared by many influential figures in Trump’s orbit, including White House deputy chief of staff Stephen Miller, the architect of Trump’s immigration policies.
Others, including former aides Elon Musk and Vivek Ramaswamy, have praised the H-1B programme for attracting top talent from around the globe to the US. The programme’s supporters and detractors are many, but under the newly-imposed rules applicable from September 21, one thing is for certain—Indian workers, both current and prospective H-1B beneficiaries, will bear the brunt of the consequences.
To understand the criticism of H-1B visas, one has to look at immigration discourse in the US.
Immigration is one of the most polarising political issues in the US. According to a YouGov poll from October, 14.6% registered voters felt it was the most important issue in the (then) upcoming election. This number was only 2.1% in 2012.
Much of Trump’s election-time anti-immigration rhetoric focused on low-skilled labour migration. Besides the intrinsic racism, this rhetoric is fuelled by the belief that such immigration depresses wages, and takes away jobs that would have otherwise gone to the American working class — which has long been hit by high unemployment, low wages, inflation, a housing crisis, and other economic problems.
Trump has successfully cashed in on such sentiments, promising to make conditions better for the average working class American by curbing immigration. His camp’s attack on the H-1B program involves many of the same themes as Trump’s “Mexicans-are-stealing-American-jobs” rhetoric — only this time in the context of immigration into the US of skilled personnel for higher paying jobs.
People born in India are the largest beneficiaries of the H-1B program. Data from the US government show that Indians account for more than 70% of all H-1B petitions approved each year since 2015. People born in China come a distant second, hovering at the 12-13% mark since 2018.
It is this dominance of Indians that has caught the attention of nativist MAGA Republicans who argue that Indians coming to the US to work in the tech industry are “stealing” American jobs and depressing wages.
Central to this argument is the claim that the H-1B program, meant to attract top talent from around the world to the US, is misused by tech corporations to staff their low-to-mid level workforce for lesser pay than what Americans would demand. When proponents of the H-1B program like Musk argue that “there is a permanent shortage of excellent engineering talent” critics hear that as them saying “Americans are too expensive to hire”.
Lutnick touched upon this theme in his Fox News interview in late August. He noted that an average American earns $75,000 a year while the average green card recipient earns $66,000 a year. “Why are we doing that? It’s like picking the bottom core,” he added.
There is some truth to this criticism. Nearly 70% of H-1B petitions approved for Indian professionals in US fiscal year 2023 were for salaries below $100,000 per annum, an analysis of data on 60,000 approvals from USCIS obtained by Bloomberg showed. For context, the median salary for IT professionals in the United States was $104,420 in May 2023, according to the US Bureau of Labor Statistics.
Around 25% of petition approvals were for salaries between $100,000 and $150,000, and only 5% were for salaries above $150,000, according to the analysis of USCIS data by The Indian Express in January.
Nonetheless, industry insiders maintain that H-1B visas are critical to bridging the skills gap in the US and that wages are market-driven. Chinese and Indians dominate the STEM fields worldwide. According to data presented by the Centre for Security and Emerging Technology (CSET) in 2020, China (3.57 million) and India (2.55 million) boast the highest number of STEM graduates in the world, significantly more than the US (820,000).
Trump swaps H-1B overhaul for fees, gold card
While many in the Trump camp have repeatedly spoken about an impending overhaul of the H-1B program, there is not a lot of publicly available information on what this overhaul would look like. The latest move to impose a $100,000 annual fee on each visa suggests that the White House has abandoned reform altogether, opting instead for a prohibitively expensive barrier.
In his first term, Trump had proposed a rule to modify the process for selecting H-1B petitions when registrations surpass the annual limit of 85,000. (This rule never saw the light of day under the Joe Biden administration). Put simply, the rule would have curbed H-1B intakes at lower salary levels, disadvantageous to international students and early-career professionals.
But now, with the $100,000 fee, a much broader range of professionals are set to be affected, as a majority of H-1B beneficiaries are paid less than $150,000.
For the very top talent, the Trump administration also introduced a “gold card” program on Friday, which grants permanent residency to individuals who can pay $1 million, or to companies that pay $2 million to fast-track a sponsored worker. The plan, proposed by Lutnick, is meant to attract entrepreneurs and high-income earners.
“We’re going to only take extraordinary people at the very top,” Lutnick said, dismissing the existing immigration system as one that brings in workers from the “bottom quartile.”
