The talk over highly expert immigrant employees is heating up.
A contentious exchange over immigration that began during Christmas between conservative activist Laura Loomer and Elon Musk has spilled over from X, now with a distinguished Democrat weighing in. The main focus, though, has turned away from undocumented employees, a central theme in Donald Trump’s presidential campaign last yr, to those here legally on H-1B visas.
Critics of the immigration program worry that these employees are displacing Americans by providing cheaper labor, especially within the tech industry, which is the biggest sponsor of those visas. Supporters say there are simply not enough US employees to fill the demand needed in these growing industries and this system’s rules prevent wage suppression.
“This program shouldn’t and was not intended to substitute the American talent. It was designed to complement it and, by and enormous, it has been working,” Jeanne Batalova, a senior policy analyst on the Migration Policy Institute, told Yahoo Finance.
But she noted that some corporations have used this system in a way that is “not inside the spirit of the law,” which is a component of what’s fueling the present debate. Here’s what to know.
Elon Musk speaks after President-elect Donald Trump spoke during an America First Policy Institute gala at his Mar-a-Lago estate, Nov. 14, 2024, in Palm Beach, Fla. (AP Photo/Alex Brandon, File) ·ASSOCIATED PRESS
Created in 1990 by the Immigration Act, the H-1B is a short lived, nonimmigrant visa program that enables corporations to request permission to rent very expert foreign employees with at the least a bachelor’s degree or equivalent. (Fashion models “of distinguished merit and talent” also fall under this visa category but without the education requirements, in keeping with the US Department of Labor.)
If granted the visa, a foreign employee can initially stay within the US under the H-1B for 3 years, with a possible extension to 6 years. But some employees stay on H-1B visas for longer than that in the event that they have an approved petition for a green card.
“We limit the number of individuals from any given country that may get a green card in a given yr, so you’ll be able to stay in H-1B status when you’re waiting to make the country’s quota,” Mark Regets, a senior fellow on the National Foundation for American Policy, said.
Because the H-1B status was created, Congress has limited the number of recent H-1B visas available every year. Currently, the annual cap is 65,000 latest H-1B visas and a further 20,000 for foreign professionals who graduate with a master’s degree or higher from a US university. That hasn’t modified since 2006.
The most important industry by far using H1-B visas is what’s categorized as skilled, scientific, and technical services, which made up almost half of all approved initial visas in fiscal yr 2024. Following that were educational services at 11.9% of all approvals, manufacturing at 9.3%, and healthcare and social assistance at 6.5%.
The most important employers of H-1B visas are subsequently concentrated within the tech sector, starting with Amazon, which had 3,871 approved H1-B petitions for brand new employment in fiscal yr 2024, followed by Cognizant (2,873), Infosys (2,504), TCS (1,452), and IBM (1,348). Other tech behemoths like Google, Microsoft, Meta and Apple are included in the highest 25. Of special note, Musk’s Tesla got here in No. 16 on the highest employers for initial H1-B visa approvals at 742.
Non-tech corporations like Ernst & Young, Walmart, Goldman Sachs, JPMorgan Chase, and Citibank all appear in the highest 25 as well, in keeping with the National Foundation for American Policy using data from the USCIS H-1B Employer Data Hub.
Overall, greater than 30,000 employers across the US had at the least one H-1B visa petition approved in 2024, and over half of those latest petitions went to employers that filed 20 or fewer applications. Employers in California, Texas, Recent York, Recent Jersey, and Virginia had essentially the most approved H-1B petitions for initial employment last yr.
The H-1B visa program has rules employers must follow to make sure that hiring a foreign employee doesn’t harm US ones. Before an employer can file a petition for a visa, it must first attest on an application certified by the Department of Labor that employing an H-1B employee won’t hurt the wages or working conditions of comparable US employees. An employer can also be required to notify its employees that it plans to rent an H-1B employee.
Within the tech field, several experts said that the expansion in those industries has occurred so quickly that there are too many positions available and never enough qualified US employees to fill them. That is why tech corporations turn to foreign labor to fulfill the demand now.
“If you happen to’re trying to grow an industry quickly, you do not necessarily have time for a complete workforce to take 10 years to get their PhD in semiconductor nano robotics,” said Courtney Shupert, an economist at MacroPolicy Perspectives. “You would like all of those PhDs now.”
Still, researchers on the Economic Policy Institute noted that the supply-demand imbalance for employees within the tech industry has been overstated. Other EPI research shows tech corporations proceed to rent H-1B employees in large numbers while shrinking their US workforces. They conclude that some tech corporations are turning to cheaper foreign employees fairly than hiring US employees. Other employers have brought over foreign tech employees and leased them out to other US corporations, which lay off their IT departments made up of local, and dearer employees, in keeping with EPI.
Why are H1-B employees cheaper? They are not purported to be. To make sure wages remain competitive, an employer must pay the H-1B employee either the identical wage it gives to other employees with similar experience and qualifications for a given job or the prevailing wage for that position in the realm it’s positioned, whichever is higher.
Regets said studies have found that almost all individuals with a short lived work visa within the US with a school degree or higher actually earn a bit greater than a comparable US-born employee. One other study showed that native-born IT professionals earn greater than other US-born professionals, indicating there is no suppression of wages resulting from H-1B employees within the industry.
However the EPI found that some corporations, again often within the tech field, are making the most of how this system level-sets wages to pay H-1B employees lower than what a US employee in the identical position would make.
Batalova noted that some corporations, often within the tech sector, have exploited loopholes in the foundations within the H-1B program. (Even Musk acknowledged this system “needs major reform” around setting minimum salaries.) A few of these issues are getting addressed, with latest rules requiring that a petition is for a particular employee fairly than a position, Batalova said.
These sorts of efforts should deter fraud, but “not be so stifling that [the program] doesn’t work in practice,” she said, noting there are very real needs H-1B employees are filling. Not only is our workforce shrinking because the Baby Boomers retire, however the pandemic also exacerbated shortages in certain industries, similar to teachers in K-12 education.
Sen. Bernie Sanders, in a release this week raising concerns in regards to the visa program, asked: “Can we actually not find English teachers in America?” The reply appears to be no in some school districts.
The city of Dallas has been leaning on international educators resulting from a shortage of bilingual teachers within the US. In 2022, the Camden City School District in Recent Jersey turned to foreign labor to assist fill 28 open positions it couldn’t find hires for after months of searching. And Milwaukee Public Schools in 2023 brought in 140 teachers from other countries, including Nigeria, Mexico and the Philippines, amid the teacher shortage.
H-1B visas also allow international students graduating from US medical schools to remain within the country and work in hospitals or clinics in underserved and infrequently distant or rural areas, Batalova said, places incidentally “where American employees won’t go.”
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Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.