The Trump administration recently increased the application fees for H-1B visas from about $1,000 to $100,000. And more changes to the system could be forthcoming.
American businesses can sponsor skilled workers with H-1B visas, most of whom come from India. The visas are intended to help fill jobs when employers can’t find local labor.
The decision to increase the fee has its share of critics, but few would argue that the H-1B system is flawless. So what might meaningful change look like?
Jeremy Neufeld, director of immigration policy at the Institute for Progress, spoke to Texas Standard about getting the most out of the visa program. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: So critics of the H-1B system say it helps keep wages relatively low and takes jobs from American workers. How fair are those critiques?
Jeremy Neufeld: Yeah, I think there’s a lot of truth to some of these critiques. And the reason is the H-1B system really is a couple of different talent pipelines housed under one umbrella of the H-1B.
On the one hand, it is the major pathway for really top talent in the United States. We have professors who will eventually go on to win the Nobel Prize coming in on the H 1B. We have major tech founders – people like Elon Musk came in on the H-1B. And so it really is an important pipeline for incredible superstar talent.
At the same time, many of the visa slots are going for more lower-paid, middling skill people. And the reason for that is that the H-1B program, it has a relatively low bar of entry and so there’s way more people who want these visas than there are available and we don’t do much to prioritize the people who are really going to contribute.
And so a lot of the slots get taken by people who might not be and people who might be undercutting American wages.
And to that point, there are way more applicants than slots. So they’re reviewed based on, I believe, a lottery system, correct?
Yeah, that’s right. So last year, there were over 300,000 workers that employers were trying to get, and there’s only 85,000 slots available.
30% of those slots eventually ended up going to companies that are really overwhelmingly relying on H-1Bs for their entire workforce. 15% of them are going to outsourcing companies, which are not really contributing to American innovation. Like some of the slots are losing out in that lottery.
And the Trump administration is considering changing this, though, right? I know that that change is in the pipeline. Could you describe what that change might look like?
Yes, so the Trump administration, I think rightfully, has seen this lottery as an insane way to select our high-skill talent.
But it’s not just the Trump Administration. This is a critique that’s been leveled from across the political spectrum. This was one thing that Joe Biden and Donald Trump actually agreed on, which was that the lottery was not a way to actually make this program work for America.
But what the Trump administration has tried to do is instead of issuing the H-1Bs entirely at random, it would give more lottery tickets, more chances at the lottery, to people who are later in their career and have greater seniority in their careers. And so what that would effectively mean isn’t necessarily that slots are going to be going to the occupations, the jobs that are going be doing the most for America. It’s going to be to older, later-career people.
And so you might have cases where someone who’s working in a job that’s only paying $50,000 might get worse chances at the lottery than a top AI scientist making a $150,000 because they’re later in their career.
And I’m curious, in your view, would this help the country get more productivity out of the H-1B system?
Yeah, I think this particular way of replacing the lottery isn’t the way to make the H-1B much more innovative or dynamic.
I’d be much happier to see the lottery replaced with something that puts more of a focus on the actual wages that people are making, which I think are a much better proxy for how much someone might be contributing to American innovation, or how unlikely they are to be undercutting American wages.
So I think hopefully the administration can change this by the time the rule is finalized. I don’t think just focusing on seniority and getting older people is likely to do the most to turn this program into the innovation engine that it could be.
And I know you just floated some other ideas, but does it make sense to perhaps narrow the pool of industries that are eligible to use H-1B visas?
Yeah, I think that is partially the goal of attaching this fee idea.
So the theory, in principle, makes a lot of sense – that if you charge a lot of money for using the visas, you’re naturally going to clear out all the people who don’t really value the visas very much. Companies that aren’t willing to pay a fee aren’t going to apply. And so you actually end up getting fewer people, maybe closer to the number of slots that are actually available.
I think this makes sense in principle. The problem is that, one, they’re applying it to H-1Bs that aren’t competing for those scarce slots. Two, there’s a huge loophole so that a lot of employers can actually just avoid the fee entirely.
And so if most employers can avoid the fee, there is still going to be a lottery and it’s not actually going to do that much to help, and the fee is probably quite too high to have the right effect. It’s probably just going to be a tax on the people who can’t take advantage of the loophole and avoid the fee, and meanwhile the major problems at the core of the H-1B system aren’t really going to be addressed.
And so, I mean, in your opinion, how will the $100,000 application fee change which businesses participate in the system?
I think it will actually not change it as much as people think, and the reason is that loophole that I mentioned.
So for people who are trying to get workers who are already in the United States on another kind of visa, they don’t have to pay the $100,000 fee. And that’s important because, right now, 80% of our H-1Bs go to people who are already in the U.S., usually on student visas. They’re usually keeping people who just graduated from U.S. universities here in the country.
And one thing that that might mean is that outsourcing companies, companies that I think everyone rightfully thinks are gobbling up too many of our H-1B slots – and it would be good to see them lose slots relative to retaining really promising young people who might actually go on to found great companies – those outsourcing companies have access to another kind of visa called the [L-1] visa, which is for intra-company transfers at multinational companies. And so they should be able to actually just bring people in on Ls and then switch them over and avoid the fees.
So I think some of the worst actors in the H-1B program aren’t going to be hit very hard by the fees, and meanwhile some of people who are trying to actually go out and do talent recruitment and find the smartest people from around the world who aren’t already here, they’re going to hit really hard.
So, I think it’s going to favor some of the bad actors and not really help the chances of some of the people who are using this program to actually help bring the best people for Team America.
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