US President Donald Trump has just proposed increasing H-1B visa application fees to $100,000. This preliminary announcement has already ignited a firestorm of controversy and debate surrounding its impact on American workers and the economy at large. The H-1B program allows US corporations to bring in foreign labor to fill positions in specialty occupations. It has emerged as the preeminent pipeline of global talent, of skilled labor, mostly from India. As over 70% of H-1B recipients hail from India, the proposed fee increase could disproportionately affect this demographic and the broader tech and medical sectors.
In light of the rampant misuse of the H-1B program, critics have long contended that the program has been designed to displace American workers. It’s vital to the U.S. ability to attract global talent. In 2023, new H-1B employees made a median wage of $94,000. Those who were already in the system received a much greater median salary of $129,000. This financial investment package recognizes the enormous economic value these essential workers contribute to our country.
H-1B visa holders and their families are an economic engine of the US economy. They give back an astounding predicted $86 billion annually. This is composed of $24 billion in federal payroll taxes as well as approximately $11 billion in state and local taxes. Numbers like that really show you how important those workers are to keeping our current level of economic growth going.
A 2015 FOIA revealed some shocking details. It demonstrated that more than 80% of all “computer” occupations under the H-1B program were occupied by Indian nationals. This pattern holds true across all industries, but is magnified in fast-moving industries, such as technology and healthcare. More than 8,200 H-1Bs were approved in 2023 for positions at general medicine and surgical hospitals. Indian-origin executives now lead all big tech firms – Alphabet (Google), Microsoft and IBM. This move brings home the indomitable power of Indian professionals on the US corporate front.
As an example, Indian doctors account for almost 6% of the physician workforce in the US. This reality makes India the largest single source of international medical graduates. International doctors account for nearly a quarter of all doctors in the US. Of them, Indian H-1B holders probably represent about 5-6%. The H-1B program is the only pathway to the US for a majority of young professionals from India. It enables the small-town programmer to make a six-figure salary and puts families in the middle-class.
The proposed fee increase raises concerns about potential labor shortages across critical sectors. According to experts, the new fees will primarily harm future applicants. These changes might pose lasting barriers to filling these critical roles.
“Since the latest White House directive indicates that the fee would only apply to new H-1B recipients, this is more likely to cause medium and long-term labor shortages instead of immediate disruption.” – Gil Guerra
Guerra reiterated their urgency, noting skyrocketing demand for new workers in both tech and medicine. This rapid development will not be evenly distributed, especially when it comes to more rural versus urban territories.
“The demand for new workers in fields like tech and medicine [in the US] is projected to increase (albeit in uneven ways), and given how specialised and critical these fields are, a shortage that lasts even a few years could have a serious impact on the US economy and national well-being.” – Gil Guerra
The impacts of the fee increase reach farther than dough and labor shortages. Companies that are most dependent on H-1B talent will undoubtedly lobby for exemptions from this new policy, undercutting the policy’s goal entirely.
“For example, given that the executive order allows for certain companies to be excepted, it could be possible that some heavy H-1B users such as Amazon, Apple, Google, and Meta will find a way to be exempted from the H-1B fee policy. If they all get exemptions, however, this would largely defeat the purpose of the fee.” – Gil Guerra
The possibility of higher costs alone can drive companies to change their hiring practices to a great extent. Filling employment-based immigration will be discouraged as employers are less likely to sponsor workers given the increased financial burden provided by the new fees.
“With employers reluctant to commit to the heavy cost of sponsorship, we could see greater reliance on remote contracting, offshore delivery and gig workers.” – Gil Guerra
Industry critics counter that these changes would prevent new ideas from bubbling up, cutting US innovation and competitiveness in the process.
“It [visa fee hike] will force US companies to radically change their hiring policies and offshore a significant amount of their work. It will also ban founders and CEOs coming to manage US-based businesses. It will deal a devastating blow to US innovation and competitiveness.” – David Bier
Those most directly affected by this proposed policy change have something to say about it. Above all, they feel uncertain about what it means for their long-term goals and professional opportunities.
“It felt like a direct attack because the fees are already paid, so there’s a big sunk cost of anywhere between $50,000 and $100,000 per student – and the most lucrative route to entering the American workforce has now been obliterated.” – Sudhanshu Kaushik