President Donald Trump altered a facet of our immigration system with a singular pronouncement.
Last week, Trump stated that the US would start enforcing a $100,000 cost for each fresh H-1B visa submission — specifically, the visa that highly qualified overseas experts utilize to be employed in the US. By elevating the cost to such an unreasonable amount, Trump intends to push firms to utilize highly qualified American employees instead – and also accumulate earnings.
“We’re going to use that money to lower levies, we’re going to decrease the deficit,” he expressed. Individuals in technological, monetary, medical, and scientific fields constitute the majority of the 85,000 persons granted H-1B visas yearly.
It’s the newest component in the administration’s limiting immigration strategy, which the administration asserts will aid Americans.
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However, Britta Glennon, an economist at the Wharton School at the University of Pennsylvania, perceives it differently. “We currently possess a lot of proof illustrating the favorable advantages that H-1B employees and skilled immigrants, more broadly, have given to the US,” Glennon expressed to the Today, Explained podcast. She fears that Trump’s recent strategy will wear away at America’s innovative capability and lessen its forthcoming opportunities.
Below is a piece of Glennon’s discussion with presenter Sean Rameswaram, revised for duration and lucidity. There’s much more in the complete podcast, so listen to Today, Explained wherever you access podcasts, including Apple Podcasts, Pandora, and Spotify.
President Trump ratified this recent order that affirms it’ll amount to $100,000 for an H-1B visa. This is something you specialize in; I’m curious about your opinion on this decision.
The concise response is: I don’t believe it’s beneficial.
The previous cost was somewhere between $2,000 and $10,000, hinging on the type of firm and a plethora of additional factors. Consequently, I believe it’s going to truly limit the utilization of the H-1B program, which will negatively affect the US economy and the American employee. We truly possess a lot of proof illustrating the favorable advantages that H-1B employees and skilled immigrants, more broadly, have provided to the US.
Just to lay out a couple of them, so that we somewhat comprehend what’s at risk here: Immigrants are exceptionally innovative. There’s one document that discovered that even though they comprise about 14 percent of the US population, they’re accountable for 36 percent of total innovation. A portion of that is because they actually render Americans more innovative. Thus, it’s somewhat the merger of a diversity of thoughts and viewpoints.
Actually, when we restricted immigrants in the 1920s with the National Origins Act, the US underwent a 68 percent decrease in patenting. And a fraction of that was because Americans actually turned out to be less innovative without immigrants present.
Immigrants are also remarkably entrepreneurial, so they’re 80 percent more inclined to launch firms than Americans are, and that naturally signifies more jobs as well.
We also know from studies what occurs when it’s restricted. I possess a document that illustrates that when the cap fell — there’s a cap, an upper limit on the quantity of H-1B visas that can be issued in any particular year — when that was diminished, US firms actually reacted by offshoring.
So there’s a lot of studies to draw on here that truly tells us a lot about what occurs when you render these H-1B visas more challenging to acquire, and naturally, more costly is another iteration of more challenging to acquire.
Assist us in understanding why he would initiate this action that, in your assessment, will damage the US economy and damage US employees.
There are two general contentions that I’ve perceived that could be triggering this.
One is this conviction that H-1B visas are actually not concerning skilled labor. They’re concerning inexpensive employees who can undercut US labor. This is not truly substantiated in the literature. For instance, I discussed how numerous big firms are offshoring or even acquiring other firms in reaction to H-1B restrictions. That’s a lot more expensive than employing an American. Right? Even at elevated wages. So that sort of reaction doesn’t appear probable if that’s valid.
“The highest-caliber individuals internationally are going to be a lot less keen on arriving in the US if they witness an environment where there’s going to be considerably fewer firms that are inclined to remit this.”
But I believe actually there’s somewhat of a more significant fundamental issue here, which is that it hinges on this conviction that there’s a fixed quantity of jobs in the US economy. Individuals believe there are a hundred jobs, and if an immigrant arrives and they assume one of those jobs, there are only 99 remaining for everyone else.
That’s not truly valid. When an immigrant arrives and assumes one of those jobs, they’re also consuming goods and services. So they’re generating demand for more goods, which firms then have to furnish. So they have to escalate production, which frequently signifies employing more individuals, more demand for services, right? So perhaps they have kids and they need to employ childcare, so more demand for childcare employees. They are escalating demand for other jobs, so they’re probable to generate jobs that way.
The second motivation is, in my view, a bit more legitimate, and that is to address a couple of the abuses in the H-1B program. There are a few firms that don’t utilize the visa in the manner that it’s intended. There are a few firms, frequently outsourcing firms, that are inundating the H-1B lottery with submissions to attempt to ensure that they’re getting a few H-1B holders. And a lot of those firms are counting on more inexpensive foreign labor. So this is a legitimate concern. There are firms that are abusing the program — but that’s not because we provide H-1B visas.
First of all, that has to do with how it’s allotted. There’ve been a lot of reforms proposed for how to alter the system to attempt to address these kinds of abuses. None of those are proposing a $100,000 fee. The issue with the $100,000 fee is that it’s not targeted in any way, so it’s going to disproportionately damage those startups who definitely can’t remit that fee. It’s going to damage entry-level positions. It’s going to damage universities who depend on H-1B visas.
It’s also rendering the country a lot less appealing for foreign talent. So the highest-caliber individuals internationally are going to be a lot less keen on arriving in the US if they witness an environment where there’s going to be considerably fewer firms that are inclined to remit this.
Well, it sounds like the administration hasn’t completely concluded how they’re going to unfold this alteration. What do you believe a superior approach to reform would be?
One significant reform that’s necessary is simply to elevate the cap. It is excessively low. I mean, I believe it hasn’t altered since the ’90s with somewhat of a blip around 2000, but once you’ve escalated the cap, then I believe you have to do away with the current lottery system.
The two most common reforms that I’ve perceived that both I believe are sensible: One would be an auction where you actually auction off petitions, and the other would be a lottery that’s basically weighted by salary or something like that. Now, in both of those cases, you would simply have to be cautious to ensure that there’s somewhat of a separate mechanism for startups and entry-level positions, because naturally they’re going to be at a disadvantage in a system like that.
But I believe that would eradicate this abuse issue and it would still permit skilled immigrant employees to arrive in the country and generate all those advantages I discussed.
Source: vox.com
